Feng shui group New Trend rearranges assets after unexpectedly bad trading

New Trend Lifestyle Group Quote more

Price: 1.50

Chg: -1.00

Chg %: -40.00%

Date: 16:34

Shares in Singapore-based New Trend Lifestyle, which operates a feng shui and fortune telling business, have plunged after it revealed a major reorganisation and warned losses would be worse than previously predicted. The AIM-listed company in September cautioned of a depressed retail environment in Singapore coupled with slower than intended progress in China.

On Wednesday, management said neither had improved as hoped and, despite overhead costs having been cut and gross profit margins remaining above 70%, the loss before tax for 2014 was now expected to be "significantly" worse than the 496,000 Singapore dollar-loss the year before.

New Trend has now decided to reorganise its business, ceasing all existing retail operations in China with immediate effect in order to concentrate "for the time being" on Singapore and continue with the current China business development projects from Singapore.

"The board believe that these actions will place it in a better position to be trading profitably on a month by month basis by [the fourth quarter] 2015 and breakeven for the year as a whole," the company said.

As of 31 March, 2015, it still remained cash positive and directors stated that they believe the company "can be put onto a profitable footing without the need for further external capital".

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Feng shui group New Trend rearranges assets after unexpectedly bad trading