Fitch Ratings has affirmed Sri Lanka-based consumer-durable retailer Singer (Sri Lanka) PLC at ‘AA(lka)’. The Outlook is Stable.
The affirmation reflects Singer’s leading market position as the largest consumer-durable retailer in Sri Lanka. The market position is supported by a nation-wide distribution network, extensive range of products and brands across price points and a well-managed hire-purchase business that supports revenue by improving affordability.
The Stable Outlook reflects Fitch’s expectation that Singer will maintain sufficient liquidity and remain below its negative rating sensitivities. We expect Singer’s leverage, measured as total adjusted debt net of cash to EBITDAR, to remain below 7.5x in the next 12-24 months, and EBITDAR fixed-charge coverage to remain above 1.3x, which are better than the levels at which Fitch would consider negative rating action.
KEY RATING DRIVERS
Strong Revenue Growth: Fitch expects Singer’s revenue to rise by 8% to LKR67 billion in the financial year ending 31 March 2022 (FYE22) from an estimated LKR62 billion in FYE21. We expect IT-related product sales to rise by 10% in FYE22 due to increased digitalisation and telecommuting requirements, and home appliance sales to climb by around 16% on import restrictions and under-penetration of the market.