Retail Holdings N.V. Announces First Half 2019 Results Including Significant Progress Toward Completing Divestment Program

The financial results for the period, as well as the historic comparables (restated), have been materially impacted by the sale, effective March 31, 2019, of the entire equity of Retail Holdings Bhold B.V., an intermediate subsidiary of the Company, which at that date owned 56.99% of the equity of Singer Bangladesh Limited ("Singer Bangladesh"). As a result of this sale, Singer Bangladesh is included in the results, classified as a Discontinued Operation, for the three months ended March 31, 2019, and for the six months ended June 30, 2019. Continuing Operations only include the results for Singer India Limited ("Singer India"), the Company's only continuing operating company, and Corporate functions.

First Half Results 

Continuing Operations

The Company's consolidated Revenue from Continuing Operations was $37.1 million, for the six months ended June 30, 2019. This compares to consolidated Revenue from Continuing Operations of $33.8 million for the same period in 2018, an increase, as measured in U.S. dollars, of 9.9%. The growth in Revenue largely reflects the growth in the appliance products offering at Singer India. Measured in local currency, Revenue at Singer India grew 17.3% during the first half of 2019, as compared with the same period prior year.

Included in Revenue are royalties from third parties (Australia, Malaysia and Thailand) totaling $350 thousand in the first half of 2019 ($346 thousand in the first half of 2018). Going forward, the Company will only receive third party royalty from Thailand ($192 thousand in the first half of 2018).

Gross profit from Continuing Operations for the six months ended June 30, 2019 was $8.6 million, representing a Gross profit margin of 23.1%, as compared to $7.8 million and a Gross profit margin of 23.2% for the six months ended June 30, 2018.

Selling and administrative expenses ("S&A") from Continuing Operations for the six months ended June 30, 2019 were $9.0 million, representing 24.2% of Revenue, as compared to $9.2 million and 27.3% of Revenue for the six months ended June 30, 2018. The decrease in S&A expenses as a percentage of Revenue in 2019, compared to the same period prior year, reflects an on-going effort to reduce Corporate costs, in light of the substantial drop in the Company's Revenue as operations have been divested. Of the Company's total S&A expenses, $6.9 million reflects S&A expenses at Singer India during the first half of 2019 ($6.5 million in the first half of 2018), and $2.0 million represents S&A expenses at Corporate in the 2019 period ($2.7 million in the 2018 period).

Other expenses, primarily, royalty paid to SVP for the use of the Singer trademark by Singer Asia and Singer India, totaled $0.3 million in both the first half of 2019 and 2018. Royalty is calculated as 0.88% of Revenue.

Results from operating activities from Continuing Operations for the six months ending June 30, 2019 and June 30, 2018 were a loss of $0.5 million and $1.4 million respectively. The reduced loss reflects the increase in Revenue and Gross profit, and the decline in S&A expenses.

Net finance costs from Continuing Operations for the six months ended June 30, 2019 were essentially nil as compared to Net finance income of $0.1 million for the same period in 2018. The swing in net finance costs primarily reflects an increase in interest expense at Singer India as a result of higher borrowings.

The Company's Loss from Continuing Operations before income taxes was $0.6 million for the six months ended June 30, 2019, compared to a Loss of $1.2 million for the same period in 2018. Income tax expense from Continuing Operations for the six-months ended June 30, 2019 and 2018 were $0.3 million and $0.6 million, respectively. For the six months ended June 30, 2019, the Company's Loss from Continuing Operations after tax was $0.9 million compared to a Loss of $1.8 million for the same period in 2018.

Discontinued Operations

Profit from Discontinued Operations, net of tax, for the six-month period ended June 30, 2019 was $42.9 million. Of this amount, $1.6 million represents Profit from the ongoing business operations of Singer Bangladesh for the three-month period January 1 – March 31, 2019. The balance of $41.3 million represents the Gain on the disposal of Retail Holdings Bhold B.V, the entity holding the Company's equity in Singer Bangladesh, effective March 31. 2019. For the six-month period ended June 30, 2018, Profit from Discontinued Operations, net of tax, was $5.1 million, all of which represents Profit at the ongoing business operations of Singer Bangladesh for the six-month period January 1 – June 30, 2019.

Total Company

The Company's total Profit for the period ended June 30, 2019 was $42.0 million, compared to a profit of $3.2 million in the same period prior year. The substantial increase in profit primarily reflects the Gain, in the 2019 period, on the disposal of Retail Holdings Bhold B.V. plus the smaller loss from Continuing Operations,  offset, in part, in the 2018 period, by the higher net Profit at Singer Bangladesh reflecting the longer (six month) ownership period.

The Profit attributable to equity holders of Retail Holdings was $ 21.2 million for the six months ended June 30, 2019, as compared to $0.2 million for the same period prior year. A Profit of $20.8 million is attributable to minority shareholders at the Company and its subsidiaries for the six months ended June 30, 2019, as compared to $3.0 million for the six months ended June 30, 2018. The increase in the percentage of profit attributable to the owners of Retail Holdings, 50.5% in the first half of 2019, as compared to 7.7% in the same period prior year, is due to the fact that no minority shareholders in the operating companies shared in the Gain on disposal of Retail Holdings Bhold B.V. and that period costs at Corporate represented a smaller share in 2019 of the much greater total Company profit.

The Profit attributable to Retail Holdings' shareholders is equivalent to earnings per Share of $4.56 for the six months ended June 30, 2019, as compared to $0.05 per Share for the same period prior year.

About Retail Holdings N.V.

Retail Holdings N.V.is a holding company with one principal asset, a 54.1% equity interest in Sewko Holdings Limited ("Sewko"), which, in turn, indirectly owns 59.9% of the equity of Singer India Limited. Singer India's principal business is the sale of sewing machine and appliances throughout India. It is primarily a wholesale business supplemented by a relatively small number of direct distribution points. Additional financial and other information about  Retail Holdings may be found at the Corporate/Investor section of the Company's website: www.retailholdings.com. Price quotations for the Company's shares are available on the "Pink Sheets" quotation service under the symbol "RHDGF".

For further information, please contact Amy Pappas at 1-914-241-3404.

RETAIL HOLDINGS N.V. AND SUBSIDIARIES CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION  JUNE 30, 2019 (Unaudited) AND DECEMBER 31, 2018
In thousands of US Dollars
			June 30, 2019		December 31, 2018 Restated
ASSETS
Property, plant and equipment			2,738		1,861
Intangible assets and goodwill			3,221		4,946
Deferred tax assets			195		189
Other non-current assets			303		295
Total non-current assets			6,457		7,291
Inventories			8,724		10,373
Trade and other receivables			12,725		9,912
Current tax receivables			331		443
Cash and cash equivalents			10,896		9,565
Other current assets			1,257		3,554
Assets held for sale			-		99,792
Total current assets			33,933		133,639
Total assets			40,390		140,930
EQUITY
Share capital			53		53
Treasury Shares			(7)		(7)
Reserves			(4,087)		(4,355)
Retained earnings			13,403		33,525
Equity attributable to owners of Retail Holdings			9,362		29,216
Non-controlling interests			14,623		36,239
Total equity			23,985		65,455
LIABILITIES
Loans and borrowings over one year			22		26
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