TRIS Rating Co., Ltd. has affirmed the ratings of Home Product Center PLC (HMPRO) and its senior debentures (HPRO083A, HPRO093A) at "BBB+" with "stable" outlook. The ratings reflect the company's position as the leading operator of home improvement retailers in Thailand, its well-accepted brand name, the ability to maintain high same-store sales growth while pursuing its store expansion strategy. The ratings also take into consideration the low profitability that is inherent in the retail business and weakening consumer confidence due to rising interest rates and oil prices.
While the "stable" outlook reflects the expectation that HMPRO will maintain its leading position in the modern home improvement industry and its strong operating performance. The company is expected to continue to improve operating efficiencies and should be able to maintain its leverage at an acceptable level while pursuing store expansion. A slowdown in property development market may lower consumer spending for new housing units, however, demand for renovation and repair existing houses is expected to partly mitigate an impact from decreasing new house purchases.
TRIS Rating reported that HMPRO is the leader in the modern home improvement retailer under the "HomePro" brand name. As of October 2005, HMPRO had 19 stores, 14 located in the Bangkok Metropolitan Area (BMA) and five upcountry. Its total sales area of 130,865 square meters (sq.m.) represents a 18% increase from December 2004. The company opened a new store at Bangna in November 2005 with sales area of 10,500 sq.m. The company offers more than 60,000 stock-keeping units of home-related products in six categories: construction materials, home decorations, tools and hardware, electrical and lighting products (including home entertainment products), garden tools, and furniture.
TRIS Rating said that HMPRO's total sales growth has averaged 45% annually over the past three years, primarily due to the favorable housing market and new store openings. In 2004, HMPRO's sales totaled Bt9,814 million, a 45% increase from Bt6,753 million in 2003. For the first nine months of 2005, total sales increased to Bt8,931 million, a 25% increase from the same period in 2004. The continuously strong growth rate came in part from 20% growth in same-store sales for 2004 and 13% for the first nine months of 2005. The slight decline in the sales growth rate for the first nine months of 2005 was partially due to consumer confidence weakening over concerns about rising interest rates and oil prices, which has affected consumer spending and new residential market. -- End
Home Product Center PLC (HMPRO) Company Rating: Affirmed at "BBB+" Issue Ratings: HPRO083A: Bt500 million senior debentures due 2008 Affirmed at "BBB+" HPRO093A: Bt500 million senior debentures due 2009 Affirmed at "BBB+" Rating Outlook: Stable
While the "stable" outlook reflects the expectation that HMPRO will maintain its leading position in the modern home improvement industry and its strong operating performance. The company is expected to continue to improve operating efficiencies and should be able to maintain its leverage at an acceptable level while pursuing store expansion. A slowdown in property development market may lower consumer spending for new housing units, however, demand for renovation and repair existing houses is expected to partly mitigate an impact from decreasing new house purchases.
TRIS Rating reported that HMPRO is the leader in the modern home improvement retailer under the "HomePro" brand name. As of October 2005, HMPRO had 19 stores, 14 located in the Bangkok Metropolitan Area (BMA) and five upcountry. Its total sales area of 130,865 square meters (sq.m.) represents a 18% increase from December 2004. The company opened a new store at Bangna in November 2005 with sales area of 10,500 sq.m. The company offers more than 60,000 stock-keeping units of home-related products in six categories: construction materials, home decorations, tools and hardware, electrical and lighting products (including home entertainment products), garden tools, and furniture.
TRIS Rating said that HMPRO's total sales growth has averaged 45% annually over the past three years, primarily due to the favorable housing market and new store openings. In 2004, HMPRO's sales totaled Bt9,814 million, a 45% increase from Bt6,753 million in 2003. For the first nine months of 2005, total sales increased to Bt8,931 million, a 25% increase from the same period in 2004. The continuously strong growth rate came in part from 20% growth in same-store sales for 2004 and 13% for the first nine months of 2005. The slight decline in the sales growth rate for the first nine months of 2005 was partially due to consumer confidence weakening over concerns about rising interest rates and oil prices, which has affected consumer spending and new residential market. -- End
Home Product Center PLC (HMPRO) Company Rating: Affirmed at "BBB+" Issue Ratings: HPRO083A: Bt500 million senior debentures due 2008 Affirmed at "BBB+" HPRO093A: Bt500 million senior debentures due 2009 Affirmed at "BBB+" Rating Outlook: Stable