TRIS Rating Co., Ltd. has affirmed the company rating of Home Product Center PLC (HMPRO) at "BBB+". At the same time, TRIS Rating has assigned the ratings of "BBB+" to HMPRO's two proposed senior debentures totaling Bt1,000 million. The rating outlook remains "stable". The ratings reflect the company's leading position in the home improvement centers in Thailand, its ability to maintain high same-store sales growth while pursuing its store expansion, and its improved operating efficiencies. The ratings also take into consideration the low profitability that is inherent in the retail business and concerns about the negative impact of rising interest rates and oil prices on consumer spending.
While the "stable" outlook reflects the expectation that HMPRO will maintain both its leading position in the 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.
TRIS Rating said for the first nine months of 2004, HMPRO's total sales grew to Bt7,135 million, a 52% increase from the same period in 2003. Its strong growth rate partly came from its high same-store sales growth of 22% for the first nine months of 2004. Its net profit of Bt269 million for the first nine months of 2004 was also higher than the full year 2003 figures. TRIS Rating said that HMPRO will use the proceeds of the proposed debentures to finance its store expansion. Despite the issuance of the proposed debentures, HMPRO's capital structure remains in line with TRIS Rating's expectation. - End
Home Product Center PLC (HMPRO) Company Rating: Affirmed at BBB+ Issue Ratings: HMPRO#1: Bt500 million senior debentures due 2008 BBB+ HMPRO#2: Bt500 million senior debentures due 2009 BBB+ Rating Outlook: Stable