The Business Message by Chairman & Group Managing Director
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GROUP STRUCTURE Avante Investment Pte Ltd Culina Pte Ltd Culina Products 100% 50% Sdn Bhd Culina Holdings Pte Ltd Culina Pte Ltd 100% 100% 50% Avante Marketing Pte Ltd Food Resources Pte Ltd 100% 100% British Master Time Pte Ltd 100% Emotus Pte Ltd Emotus Sdn Bhd 100% 100% Franck Muller Pte Ltd 100% Heirloom Restoration Services Pte Ltd 100% Heritage Distribution Pte Ltd 100% Parisian Time Pte Ltd 100% Quantum Communications Pte Ltd 100% Richburgh Holdings Pte Ltd 50% Sincere Watch Duty Free Pte Ltd Sincere Watch Limited 50% Swiss Master Time Pte Ltd 100% Times Legend International Pte Ltd 100% Sincere Watch Limited Avante Marketing (M) Sdn Bhd Sincere Watch Sdn Bhd Hong Kong Branch 100% 15% Sincere Watch Sdn Bhd 65% BVL Partner Co Ltd 49% Pendulum Ltd 49% 02 The Business Leoco Enterprise Limited 04 Message by Chairman & 75% Group Managing Director Sincere Brand Sincere Brand Pendulum Sincere Watch (Hong Kong) Limited Holdings Limited Management Limited Limited 08 Corporate Data 75% 100% 100% 100% 10 Group Structure Unisky Limited 11 The Retail Network 33.33% 12 Stepping Stones of Success Sincere Watch Co. Ltd 14 Sincere Haute Horlogerie 100% 18 Singapore 28 Malaysia 36 Thailand 40 Indonesia 42 Hong Kong & Shanghai 46 Taiwan 50 Korea 52 Financial Report THE BUSINESS Achievements are often measured with reference to time. and Sincere has used this understanding to segment its For more than 50 years, one man’s journey from a modest vast, diverse and comprehensive product range into three watch retail outlet in Singapore has weaved in lockstep distinctive series. with a nation’s growth to become one of the most vibrant companies of its kind in the region. This has come with The Series Technics is a technologically attuned the ability and capacity to change with the times. segment that focuses on watches with great mechanical complexities. The market for engineering intricacies is a Tay Boo Jiang’s venture into watch retailing along growing one, and the brands and models designated here Singapore’s North Bridge Road back in 1954 has grown border on the limits of man’s ability to create complicated into Sincere Watch Limited, a leading retailer and timepieces of the utmost quality. distributor of the world’s top watch brands in Asia. The company’s success through the years is predicated upon Watches in Series Luxe thrive on the luxuries life being able to feel the pulse of the thriving market for provides. Gems and precious stones are the orders of the luxury items, and the foresight to shape a business to day in horological masterpieces that are as much art as take advantage of that development. they are technology. The timepieces here are for those who enjoy the finer things in life, and are willing to go The many facets of the business and its markets dictate the distance in obtaining them. the need to address each one in a different way. As such, Sincere’s success is built from four different strategic Today’s active lifestyle aficionados will enjoy the timepieces aspects – Brand Management; Fine Watch Retailing; under Series Active. Sporty, rigorous, these watches Lifestyle Watch Retailing; and Travel Watch Retailing. offer the best in performance, yet are able to take you from the rigors of an active lifestyle. The company’s innovative approach is reflected in the retail concepts that drive its business. Different products lend themselves to different marketing and sales strategies, The Luxury of Time SINCERE WATCH LIMITED ANNUAL REPORT 2005/2006 Brand Fine Watch Travel Watch Lifestyle Watch Management Retailing Retailing Retailing The astounding growth of brands Fine watch retailing continues to Tourism is on the up trend, and Sincere has carved a niche in such as Franck Muller, be an integral part of the sales from travelers are rising in lifestyle retailing through the A. Lange & Söhne, F.P. Journe, company’s operation. Through tandem with the current emotus Time Culture retail de GRISOGONO, Pierre Kunz, its boutiques and expansive retail phenomenon of escalating air concept. These stores and Chaumet, Dubey & network, Sincere is well poised travel. Sincere has addressed this marketing directives target the Schaldenbrand, Giuliano to benefit from the world’s heightened sense of travel with vast potential that exists in a Mazzuoli, European Company increasing appetite for the best a dedicated strategy in pursuing market where consumption is Watch, CVSTOS, as well as timepieces that watch houses revenue from traveling based on the hottest idea in time. exclusive retail brands like Zenith have to offer. In an industry ruled customers. The completion of As this group of upwardly mobile and L.U.C by Chopard by dynamic trends, Sincere prides Terminal 3 in early 2008 will see professionals step up their buying Manufacture is well documented. itself on its ability to spot new a staggering influx of visitors power, emotus is there to provide They have penetrated the ceiling talents, market needs and niches which points towards an an ongoing list of unique brands. of repute, transcending into the to be carved out. Furthermore, enormous airport retail market emotus stores reflect today’s high upper echelons of watch making Sincere’s dedicated staff is to capitalize on. The retail outlets expectation for design, parading in the Asian context under empowered with the at the Singapore Changi an air of minimalism that stands dedicated care by Sincere Watch. watchmaking knowledge and International Airport, and at the fickleness of time. The Brand Management on this scale understanding of how to best Vietnam’s Ho Chi Minh City concept has garnered great requires an in-depth appreciation approach, and win over the Airport has provided the group success and feedback from the of market demands as well as confidence of customers looking with the impetus at targeting this Singapore and Malaysia market the ability to communicate this for the best. sector. These ideally located stores and is destined to be a key aspect understanding and, to a large combine with a carefully planned of Sincere’s growth map. extent, enthusiasm to the marketing effort to ride the emerging group of world-savvy increasing wave of tourism from watch collectors. Endeavors to all quarters. deliver these goals are accomplished through various social and media events including press events, gala dinners, fashion shows, watch exhibitions and parties. 03 The Luxury of Time SINCERE WATCH LIMITED ANNUAL REPORT 2005/2006 MESSAGE BY CHAIRMAN & GROUP MANAGING DIRECTOR The past year has been landmarked with major strategic re-structuring process where Hong Kong is established as the operational base for the Group’s further penetration into the milestone achievements for Sincere and our North East Asian market. earnings are at an all time high. Resonating with the up trend for tourism, luxury and retail Listing in Hong Kong will enable the Group to leverage on Hong Kong’s trend setting advantage in the region and capitalize on its vibrancy in Singapore and the region, the Group position as a gateway to China for our unique watch brands. The is committed to contribute to the Singapore funds raised will be used for its business expansion in the region tourism industry and strengthen its rising where the luxury, retail and tourism industries are all experiencing robust growth. position in the world of horology. Customers, stakeholders and shareholders alike will be Rewarding Shareholders In view of the Group’s outstanding performance, the Board has promised a top quality investment. proposed a total dividend of 2.65 cents a share, comprising a first and final dividend of 1 cent per share less tax and a special dividend Sterling Financial Results of 1.65 cents per share less tax for the year. Once again, the Group achieved another year of record profit. Group profit increased 78% from S$19.1 million to S$34.1 million, Going forward, the Group will review its financial needs and the highest ever in the Group’s history. performance of the Company after the next six months with a view to recommending additional dividends for the purpose of discharging The profit included a one-time gain of S$10.6 million as a result of the Section 44 tax credit balance of approximately S$5 million. the listing of the Group’s subsidiary, Sincere Watch (Hong Kong) Limited, on the Hong Kong Stock Exchange. However, even without Strengthening of Management Team taking this one-time gain into account, the adjusted pre-tax profit The Group prides itself on being innovative and dynamic. This of S$31.7 million is still 33.8% higher than the previous year. winning characteristic of the Group is well aligned with the Corporate and Business Divisions. The management team was restructured This remarkable achievement enabled the Group to improve on its for future growth. Our key management appointments will stand average gross margin although the year saw a slight drop in revenue us in good stead, giving us the competitive edge for progress. of 1.9% from S$324.3 million to S$318.2 million. The improvement in the average margin mitigated the decline in revenue. Reasons Launch of Innovative Retail Concepts for this decline were principally due to refurbishment of key shops The Group continued to reach out to its many important market that led to the temporary discontinuance of sale as well as the segments with innovative new retail concepts. The Group’s key cessation of one of the Group’s travel retail concessions in Singapore boutiques were refurbished to give a new contemporary look in Changi Airport. In addition, sales in Hong Kong were slightly slower order to provide constant vibrancy for clienteles.