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DRIVING IT UP
STAMFORD TYRES CORPORATION LIMITED
Dear Shareholders,
O
ur group net profit
for FY2016 rose by
52.0% to $2.6 million,
a result that was
largely shaped by a
strong region (Southeast Asia) and a
strong joint venture (in Hong Kong)
against an unfavourable backdrop of
an oversupply of tyres globally. Our
gross profit margin rose to 24.7% in
FY2016 from 22.1% the year before,
against an 18.0% drop in revenue to
$239.9 million in FY2016.
As I have emphasised internally and
during AGMs, the sustained overall
gross profit margin is attributable
to our continued drive to do more
value-added services – especially
from our Stamford Tyres Mart retail
operations, truck tyre centres, and
total fleet management.
Furthermore, we seek to sell more
specialty products such as tyres for
agricultural, industrial and mining
use.
In addition, we constantly seek to
balance profit margins and sales
volume.
And, needless to say, all the time, we
look for ways to manage our costs
better.
Total operating expenses decreased
by 6.1% to $58.2 million in FY2016
compared to $62.0million in FY2015.
We experienced lower marketing
and distribution costs, salaries and
foreign exchange costs but higher
finance costs and allowance for
doubtful debts.
Our strategy can be seen in the
results of our primary market,
Southeast Asia, which once
again delivered commendable
performance. It produced pre-tax
profit of $5.5 million on revenue of
$204.0 million. The pre-tax profit
was 10.5% higher year-on-year
despite revenue declining by 16.1%.
JOINT VENTURES
In Hong Kong, we tweaked our
operations, managed our operating
costs better, and saw a positive
jump in the performance of our Tyre
Pacific (HK) joint venture. This joint
venture has Dunlop tyre distribution
rights for Hong Kong, Macau and
Indochina.
Letter to
Shareholders
“As I have emphasised internally and
during AGMs, the sustained gross profit
margin is attributable to our continued
drive to do more value-added services
and selling more specialty products such
as tyres for agricultural, industrial and
mining use. In addition, we constantly
seek to balance profit margins and sales
volume. All the time, we look for ways to
manage our costs better.”
