YuuZoo surges in brisk trading on stronger Q1 profit, revenue
This came on the back of what YuuZoo described as "very
strong" results for the first quarter ended March 31, 2016, which it
announced late on Thursday.
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Jacquelyn Cheok
07 May 2016
YuuZoo, a mainboard-listed social media, e-commerce and entertainment company, was the second-most active stock on Singapore Exchange on Friday, after commodities trader Noble.
At the close of trading, some 44.45 million YuuZoo shares had changed hands. The stock finished 7.5 per cent higher at S$0.215. In the late morning to early afternoon, the stock rose by as much as 12.5 per cent to S$0.225 from its previous close of S$0.20.
This came on the back of what YuuZoo described as "very strong" results for the first quarter ended March 31, 2016, which it announced late on Thursday.
Net profit nearly trebled year-on-year from S$4.3 million to S$12.8 million. Revenue more than trebled from S$13.1 million to S$45 million on stronger e-commerce and franchise sales.
Revenue from e-commerce - comprising online sales and online payments - added S$25.3 million to reach S$28.6 million. Franchise sales came up to S$13.3 million, a 74 per cent increase from S$7.6 million a year ago.
YuuZoo, which has created a "virtual shopping mall" featuring e-commerce, social networking and entertainment services, adopts a franchise model. Each time it enters a new country, it appoints a local partner or franchisee to run its virtual shopping mall. Franchisees pay YuuZoo for the franchise licence in cash, shares or a combination of the two; YuuZoo has a presence (via franchisees) in over 68 countries.
Network sales were at S$3.1 million in Q1 2016 versus S$2.2 million last year. YuuZoo builds for brands and organisations their own social networks that are interest-, location- or age-specific.
A YuuZoo spokesman said: "We sell networks for cash and non-cash consideration. The non-cash sales arise when YuuZoo provides a network to a celebrity or an organisation in exchange for endorsement and advertising rights.
"In this case, the rights received are independently valued and this value is revenue to YuuZoo. These rights are amortised over the useful or contract life of the endorsements received."
Earnings per share was 2.02 Singapore cents for Q1 2016, up from the previous year's 0.68 Singapore cent. No dividend has been declared for the period.
YuuZoo said: "The group is not declaring any dividend cash, (but) wants to underline that the method of receiving payment for the exclusive franchise licenses (in shares in the companies that run the franchise operations) is designed to enable the group to sell shares and distribute the proceeds as dividends once the franchisees' operations achieve sufficient volume and value."