In a challenging year, pawnbroker ValueMax Group saw its revenues fall yet still managed to increase its overall gross profit by S$2.8 million (US$2 million).
Its improvement in overall gross profit is attributed to the group’s higher revenue mix from the pawnbroking and moneylending businesses.
In its annual report for 2015, it said the group had faced rising interest rates and a lacklustre performance for gold. There had also been growing competition and rising running costs.
Revenue decreased from $324.5 million in 2014 to $269.9 million. Revenue from retail and trading of pre-owned jewellery and gold fell by $57.5 million, while revenue from pawnbroking was relatively stable. Moneylending contributed $2.7 million to the group’s revenue.
“Going forward, we expect the business environment to remain challenging, with rising uncertainties in gold price and interest rates,” says the group’s annual report. “Nevertheless, the group will continue to seek opportunities to grow its business through acquisitions and setting up new pawnbroking and retail outlets both in Singapore and overseas.”
During the year, ValueMax adopted a strategy of deepening and broadening the scope of its businesses, duplicating its systems while expanding its network locally and in Malaysia. As part of this, it opened a new pawnbroking and retail outlet in Singapore and two in Malaysia, and acquired Kwong Hin Pawnshop in Singapore.
“We believe there is a growing demand for pre-owned jewellery in the retail market. As such, our subsidiary ValueMax Retail, which sells pre-owned jewellery and works within the premises of our pawnbroking outlets, has expanded its business.”
For the group’s gold trading business, the removal of goods and services tax on investment-grade precious-metal bars (IPM bars) had a positive impact by increasing demand. “Additionally, our pawnbroking business will get to ride on the upside of gold-price recovery as our trading business procures more gold from our pawnbroking operations. Our retail business will also benefit from an increase in the range of pre-owned watches and jewellery merchandise available for retail sales.”
A change in regulations this year also allows pawnshops to sell new jewellery, which is expected to generate extra income.
ValueMax Group and its subsidiaries provides pawnbroking and secured money-lending services, as well as the retail and trading of pre-owned jewellery and gold. Its first pawnbroking outlet opened in 1988. It now has 24 outlets in Singapore and three other pawnshops run by associated and investee companies.
In Malaysia, ValueMax has eight outlets through associated companies.
