Orchard Road 'should not sleep': Metro's retail chief David Tang

MAY 31, 2017

So says Metro's retail chief, as firm sees Q4 revenue inching up on higher sales

Rachael Boon

Orchard Road should be the street that never sleeps, according to Mr David Tang, chief executive of Metro's retail business.

Giving his personal opinion, he said it would be nice to have a "day Orchard" for shopping and an Orchard that comes alive at night, with restaurants or watering holes that could attract young people too.

And food is always a major draw as that is what Singapore is good at, Mr Tang told The Straits Times after Metro Holdings' fourth-quarter results briefing yesterday.

Net profit surged to $34.2 million from $1.2 million for the three months to March 31, on the back of unrealised fair gain value and a higher share of results of associates.

Revenue inched up 3.5 per cent to $33.7 million as the retail division reported higher sales.

Full-year net profit fell 28.7 per cent to $80.7 million, while revenue dropped 15.1 per cent to $131.2 million, compared with the same period a year ago, as the retail division no longer had contributions from Metro Sengkang and Metro City Square, which both closed in 2015.

There was an absence of a one-off gain compared with $38.1 million in the previous financial year, when the property development and investment group sold its 50 per cent stake in the joint venture that owned the EC Mall in Beijing.

Metro group chief executive Lawrence Chiang noted that "we've launched everything, except the middle and low-rise blocks" at The Crest in Prince Charles Crescent, River Valley, its residential project with developer Wing Tai.

"Most of the units at the other two towers, where there are small units, have been sold," he added.

"The problem is the bigger units because of the price point. Anything above $2.5 million to $3 million is more difficult to sell."

The firm acknowledged that for the retail division, pressures on margins, and operating and overhead costs had affected profitability.

But with stronger performance from Metro's Indonesian associate, profit contributions from the retail division rose to $1.3 million.

The firm has three department stores here - two in Orchard Road and one in Woodlands.

It has been engaging customers through Facebook and Twitter and "we're establishing a MetroApp where we're able to sell products on", said Mr Tang. The app is slated to be ready by the fourth quarter.

Executive chairman of the retail business Wong Sioe Hong said: "For our marketing plan, our digital platform mirrors our print media. We're working hard and driving more promotional campaigns. We're happy with the result. Relative to the market, I think our numbers are strong.

"In a very difficult market, we are doing relatively well."

Yearly earnings per share was 9.7 cents, compared with 13.7 cents a year ago, while net asset value per share was $1.63 as at March 31, compared with $1.66 a year earlier.

Metro declared a final dividend of two cents a share. It also declared a special dividend of three cents a share - two cents lower than a year ago. Earnings were posted before trading hours. Metro shares closed down 1.5 cents at $1.155 yesterday.