Full year results out. Good results considering the headwinds.
(Vested)
http://infopub.sgx.com/Apps?A=COW_CorpAn...3edb69dd2e
SINGAPORE, 29 May 2015 – Japan Foods Holding Ltd. (“Japan Foods” and together with its subsidiaries, the “Group”), a leading Singapore-based Japanese restaurant chain, has achieved net profit of S$4.7 million on the back of S$62.7 million in revenue for the year ended 31 March 2015 (“FY2015”).
In FY2015, the Group’s gross profit rose 2.1% to S$52.3 million in tandem with the increase in gross profit margin, which rose 1.8 percentage points from 81.6% in the financial year ended 31 March 2014 (“FY2014”) to 83.4% in FY2015. This was mainly due to better control of raw material costs arising from efficient use of raw materials andcost savings from self-produced noodles, bulk purchase discount, price revision of menu items and the appreciation of the Singapore dollar against the Japanese yen.
However, the Group incurred higher expenses during the financial year mainly in relation to its network expansion in Singapore, which increased from a total of 44 restaurants and outlet as at 31 March 2014 to 46 restaurants and outlet as at 31 March 2015, as well as monetary incentives given to staff to increase retention rate amidst a tight labour market.
Selling and distribution expenses, which formed 70.9% of the Group’s revenue in FY2015, rose 12.1% to S$44.4 million mainly attributable to a S$1.0 million hike in employees’ salaries due to an increase in headcount for both part-time and full-time employees and higher base salaries as well as a one-off incentive payment of S$0.4 million to retain existing staff. The Group also incurred higher rental costs because of rental revisions for restaurants located at existing malls and additional rental costs for new store openings.
As a result, the Group’s net profit attributable to equity holders of the Company declined by 35.2% to S$4.7 million in FY2015.
NAV per share as at 31 March 2015 was 17.57 Singapore cents as compared to 16.93 Singapore cents as at 31 March 2014. At the end of FY2015, the Group’s cash position remained healthy with cash and cash equivalents of S$15.9 million with no borrowings.
According to Executive Chairman and CEO of Japan Foods, Mr Takahashi Kenichi, the first half of FY2015 was particularly challenging for Japan Foods because of intense competition in the F&B scene, which was further compounded by the manpower shortage that resulted from the government imposed reduction in the foreign labour quota. However the Group enjoyed better performance in the second half with net profit increasing 61.1% from S$1.8 million in the first half to S$2.9 million in the second half of FY2015.
He said: “Despite the challenges in the first half, we were able to end the financial year with healthy sales mainly because of measures we had taken since FY2014 to mitigate such issues, such as introducing an iPad self-ordering system, expanding the capacity of our central kitchen, as well as offering monetary incentives to retain existing staff. In FY2015, in addition to higher hourly wages and a retention bonus for eligible staff, the management team pitched in during the weekends to help out with service at busy outlets.
“Although our earnings are down year-on-year, we are optimistic that our expanded restaurant network will contribute to our top and bottom lines in the longer term. The Group is confident that the variety of Japanese cuisine concepts that we offer within our extensive brand portfolio remains attractive to a broad range of customers and our constant effort in responding to customers’ taste and demand will yield fruitful returns.” Subject to approval by shareholders at the forthcoming Annual General Meeting in July 2015, the Group has proposed a final dividend of 1.27 Singapore cents per share. This will bring the total dividend payout in FY2015 to 2.00 Singapore cents per share, taking into account the interim dividend of 0.73 Singapore cents per share which was paid on 28 November 2014. This represents a total dividend pay-out of S$3.5 million, or 73.5% of net profit, in FY2015, which is higher than the Group’s dividend policy to distribute not less than 40.0% of the Group’s audited consolidated net profits attributable to shareholders annually.
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