Convenience Retail Asia posted a “satisfactory” performance for its third quarter despite weakened consumer sentiment in Hong Kong and Guangzhou.
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The operator of Circle K convenience stores and Saint Honore cake shops, posted an increase of 0.4% in net profit to HK$28m year-on-year.
Weakening domestic consumption, rising inflation and financial distress all
contributed to a downturn in Hong Kong in the third quarter of the year. Despite this, the group achieved a10.8% increase in turnover HK$898.5m,largely due to the opening of new stores, an increase in comparable store and ‘festive’ sales.
The group held a net cash position of HK$484.4m as of 30 September.
“Despite the turbulence in the global financial markets and prevailing negative consumer sentiment, we believe there are opportunities to maintain the group’s performance at acceptable levels even with more challenging times ahead,” said Richard Yeung, chief executive officer of CRA.
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By GlobalData“In the meantime, our substantial cash reserves and healthy cash flow without any bank borrowings should also protect us against the global credit crunch.”
Comparable convenience stores sales in Hong Kong and Southern China increased by 5.2% and 5.5% respectively over the third quarter of 2007.
The group said it is looking to “moderate” its business expansion and close less profitable stores in the near term as it takes steps toward securing its long-term business interests.
