Stamford Tyres “Laid Foundations for Future Growth” in FY2010

Singaporean tyre and wheel distributor Stamford Tyres has announced a net profit of S$9.4 million (£4.5 million) for the end of financial year 2010, which ended on 30 April, over eight times the net profit of S$1.0 million in FY2009. The company’s president and CEO, Wee Kok Wah said: “Over the past year, we have worked hard to lay the foundations for the Group’s future growth… In accordance with the much improved set of results the Board of Directors has recommended a final dividend of 1.0 Singapore cents to reward our loyal shareholders.” The company reduced its operating expenses by 16.3 per cent, from S$64.5 million in FY2009 to S$54.0 million in FY2010, while Stamford experienced the slightest of declines in gross profit – down 1.5 per cent to S$66.5 million – and its gross profit margin, which was at 21.4 per cent as opposed to 22.7 per cent the previous year. Higher tyre purchase prices worldwide and lower sales from the Group’s Thai wheel plant were the main causes.

“I am pleased to say that we have made good progress in markets such as South Africa, where we commenced sales of Falken tyres in October 2009,” continued Wee Kok Wah. Stamford Tyres’ management aimed to improve forex management in addition to operating costs, resulting in a forex gain of S$1.7 million compared to a S$5.8 million loss in FY2009. Much of this was reportedly due to the “strengthening of the Indonesian Rupiah and the South African Rand against the US dollar”, according to the company’s statement.

“[W]e look forward to enjoying an entire year of its contribution to our bottom line in 2011. We have also managed to secure more manufacturing capacity for our proprietary Sumo Firenza brand tyres, which continues to gain traction in overseas markets… Looking ahead, market conditions remain challenging as tyre manufacturers continue to increase prices due to high costs of raw materials. Nevertheless, we will continue to optimise our product mix, manage our costs and increase productivity wherever possible,” concluded Wee Kok Wah’s statement.

Stamford also revealed that the Group’s cash and bank deposits grew from S$17.0 million to S$35.6 million across FY2010, while the company decreased inventory levels from S$97.0 million to S$89.5 million.