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Financials
Condensed Interim Consolidated Financial Statements For The Six Months Ended 31 March 2024
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Condensed Interim Consolidated Statements Of Profit Or Loss And Other Comprehensive Income
Condensed Interim Statements Of Financial Position
REVIEW OF PERFORMANCE OF THE GROUP
Revenue
Our Group’s revenue increased by 13.0% or $11.2 million, from $85.9 million for the six months ended 31 March 2023 (“1H2023”) to $97.1 million in 1H2024 mainly due to an increase in revenue from our Singapore operations and $0.3 million franchise fee received for two new outlets.
The rebound of business and social events, along with inbound tourism, combined with a full half‐year operations from our Jumbo Seafood outlet at the Riverwalk and extended operational hours at most of our Jumbo Seafood outlets resulted in an increase in revenue from our Singapore operations by 21.5% or $15.1 million, from $70.2 million in 1H2023 to $85.3 million in 1H2024.
Despite the relaxation ofzero‐COVID policy in the PRC in December 2022, the PRC market has not returned to pre‐ COVID levels. The revenue from our PRC operations decreased by 26.2% or $3.5 million, from $13.4 million in 1H2023 to $9.9 million in 1H2024. In addition, our Jumbo Seafood outlet in Xi’an ceased operations in November 2023.
Revenue for our Taiwan operations decreased by 20.4% or $0.5 million, largely due to reduced foot traffic in the mall where our outlet is located.
Cost of sales
Cost of sales, which comprised raw materials and consumables, increased by 12.3% or $3.6 million, from $29.1 million in 1H2023 to $32.7 million in 1H2024, in‐line with the increase in revenue.
Gross profit
Gross profit increased by 13.3% or $7.6 million, from $56.8 million in 1H2023 to $64.4 million in 1H2024. Gross profit margin increased by 0.2 percentage points from 66.1% in 1H2023 to 66.3% in 1H2024.
Other income
Other income decreased by 66.6% or $2.5 million, from $3.7 million in 1H2023 to $1.2 million in 1H2024. This was primarily attributed to the reduction in income from government grants and wage creditscheme, from $1.9 million in 1H2023 to $0.2 million in 1H2024. In addition, the Group had a loss on investments at FVTPL classified under other income of $0.3 million as compared to a gain of $0.2 million in the same period last year.
Employee benefits expenses
Employee benefits expenses increased by 15.7% or $4.2 million, from $26.6 million in 1H2023 to $30.8 million in 1H2024, mainly due to increases in headcount required for our business operations, and accordingly salary and bonuses in 1H2024.
Operating lease expenses
Operating lease expenses decreased by 21.5% or $0.7 million, from $3.1 million in 1H2023 to $2.4 million in 1H2024. This decline can be attributed to lower variable rental expenses.
Utilities expenses
Utilities expenses increased by 8.1% or $0.2 million, from $2.4 million in 1H2023 to $2.6 million in 1H2024, resulting from the increase in revenue and higher utility rates in general.
Depreciation and amortisation
Depreciation expense for property, plant and equipment decreased by 0.9% or $0.1 million, from $2.8 million in 1H2023 to $2.7 million in 1H2024.
Depreciation expense for right‐of‐use assetsincreased by 3.6% or $0.2 million, from $5.8 million in 1H2023 to $6.0 million in 1H2024.
Other operating expenses
Other operating expenses, which include cleaning services, repairs and maintenance, credit card and delivery services commission, general supplies and marketing expenses, increased by 5.7% or $0.5 million, from $9.2 million in 1H2023 to $9.7 million in 1H2024 due to the increase in business activities.
Income tax expense
The income tax expense of $2.2 million in 1H2024 was recognised mainly due to profits from the Singapore operations.
Profit attributable to owners of the Company
As a result of the above, profit attributable to owners of the Company stood at $8.9 million for 1H2024 compared to $8.0 million in 1H2023.
REVIEW OF THE FINANCIAL POSITION OF THE GROUP
Current assets
The Group’s current assets decreased by $13.7 million to $58.6 million as at 31 March 2024, largely due to:
- a decrease in cash and cash equivalents of $11.3 million mainly due to off‐market equal access share buyback exercise which amounted to $9.8 million during the period;
- a reduction in structured deposits under short‐term investments of $2.7 million, allocated towards the opening of new outlets as well as working capital; and
- a decrease in inventories of $0.1 million; and partially offset by
- an increase in trade and other receivables of $0.3 million.
Non-current assets
The Group’s non‐current assets increased by $0.6 million to $59.9 million as at 31 March 2024, largely due to:
- an increase in property, plant and equipment of $4.2 million mainly due to the purchase of a property for our central kitchen in 1H2024 and opening of one new outlet each in Singapore and Nanjing, PRC. This is partially offset by the disposal of assets due to the closure of our Xi’an outlet;
- a decrease in right‐of‐use assets of $3.2 million to $20.8 million, mainly due to due to amortisation of right‐ of‐use assets; and
- a decrease in investments at FVTPL of $0.3 million due to fair value loss.
Current liabilities
The Group’s current liabilities decreased by $1.2 million to $43.8 million as at 31 March 2024 mainly due to:
- a decrease in lease liabilities of $1.3 million mainly due to reduction in office space and rental expenses for an outlet in the PRC;
- a decrease in trade and other payables of $1.2 million; and
- an increase in income tax payable of $1.2 million mainly due to profits from the Singapore operations.
Non-current liabilities
The Group’s non‐current liabilities decreased by $4.1 million to $22.7 million as at 31 March 2024. This reduction stemmed from a $2.2 million repayment of bank borrowings and a decrease in lease liability of $1.9 million. The latter was mainly due to the closure of a Jumbo Seafood outlet in Xi’an and a reduction in office space and rental expenses for an outlet in the PRC.
REVIEW OF THE CASH FLOW STATEMENT OF THE GROUP
The Group generated net cash from operating activities before movements in working capital of $19.6 million for 1H2024. Net cash generated from operations amounted to $18.3 million due to an increase in trade and other receivables of $0.3 million, a decrease in inventories of $0.1 million and a decrease in trade and other payables of $1.2 million. Including the $0.4 million interest income received, $0.2 million paid for interest and $1.0 million income tax paid, net cash generated from operating activities was $17.4 million for 1H2024.
Net cash used in investing activities amounted to $4.0 million mainly due to:
- acquisition of property, plant and equipment of $7.0 million, of which $4.0 million was for the acquisition of a property used for our central kitchen and $3.0 million is used for opening of new outlets in Singapore and the PRC; partially offset by
- $0.2 million from disposal of assets from the closure of our Xi’an outlet; and
- $2.9 million proceeds from short term investments, primarily attributed to the withdrawal of structured deposits during the period.
Net cash used in financing activities for 1H2024 of $24.8 million was mainly from share buyback and purchase of treasury shares of $9.8 million, the repayment of lease obligations of $6.4 million and repayment of bank borrowings of $2.1 million and dividends paid to owners of the Company of $6.4 million.
As a result, cash and cash equivalents decreased by $11.3 million during the financial period to $22.3 million as at 31 March 2024.
Commentary on current year prospects
A year after the lifting of vaccination‐differentiated safe management measures in Singapore, together with the easing of global border restrictions, our key brands – JUMBO Seafood and ZUI Teochew Cuisine – have returned to pre‐COVID business operations and performances. For 1H2024, both JUMBO Seafood and ZUI Teochew Cuisine outlets experienced stronger festive sales. This improvement was further bolstered by the revenue from the reopened JUMBO Seafood outlet at The Riverwalk in January 2023, the launch of the new Ng Ah Sio Bak Kut Teh at The Central in January 2024 and the extension of operational hours at majority of our JUMBO Seafood outlets.
Our outlets in the PRC are facing ongoing challenges attributed to a weak economy, largely influenced by the struggles within the real estate industry. To address these economic challenges, our Group has undertaken strategic measures to optimise operations and enhance efficiency in line with the prevailing market conditions.
Despite healthy revenue growth in Singapore, we remain cautious about challenges such as increasing raw material costs and ongoing manpower shortages. Nevertheless, we are dedicated to managing these operational costs as effectively as possible by improving productivity and utilising resources efficiently. We are committed to leveraging technological advancements and fostering innovation through talent acquisition and development. These efforts are aimed at ensuring sustainable growth whilst maintaining our competitive edge. Barring any unforeseen circumstances, the Group is cautiously optimistic on its business performance for the next 12 months.