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THIRD QUARTER FINANCIAL STATEMENT AND DIVIDEND ANNOUNCEMENT FOR THE FINANCIAL PERIOD ENDED 30 SEPTEMBER 2016

Financials Archive

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Income Statement

Balance Sheet

Review of Performance

Revenue and Profitability

The Group's revenue for the financial period ended 30 September 2016 ("9M2016") was $28.2 million, a decrease of $2.6 million or 8.4% as compared to $30.7 million for the financial period ended 30 September 2015 ("9M2015"). This was mainly due to the loss of revenue from the closure of three outlets in the second and third quarters. Nevertheless, the revenue from the existing and additional four new outlets has increased by $1.0 million. Revenue for the food processing, distribution and procurement services segment has also increased by $0.2 million or 19.4%.

Other income was mainly related to government grants received for the Wage Credit Scheme and Special Employment Credit.

Purchases and other consumables were maintained at approximately 23.0% of revenue as compared to 9M2015.

Employee benefits expenses decreased by $1.3 million or 11.3% in 9M2016 mainly due to the closure of three outlets and a reduction in headcount and related staff costs for existing outlets of approximately $1.6 million, offset by an increase in employee benefits expenses for the new outlets.

Other expenses decreased by $0.7 million or 6.7% in 9M2016 mainly due to a net decrease in operating expenses of $0.3 million as a result of closure of the three outlets and opening of four new outlets as well as a decrease in advertising expenses of $0.1 million and professional fees of $0.3 million.

As a result, the profit before income tax increased by $0.2 million or 38.1% as compared to 9M2015. Earnings per share increased from 0.14 to 0.21 cents in 9M2016.

Review of Financial and Cash Flow Position

Non-current assets amounted to $3.0 million as at 30 September 2016 ("3Q2016") and 31 December 2015 ("FY2015"). The additions of plant and equipment of $1.3 million was offset by the depreciation and amortisation expense of $1.2 million and plant and equipment written off of $0.1 million.

Current assets decreased by $1.5 million as compared to FY2015 mainly due to decrease in cash and cash equivalents of $1.3 million. The decrease was attributable mainly to purchases of plant and equipment of $1.1 million, payment of final dividend of $0.9 million and purchases of treasury shares of $0.6 million, offset by net cash from operating activities.

Current liabilities decreased by $0.5 million mainly due to decrease in trade and other payables of $0.6 million as a result of decrease in accrued staff bonuses and payment for accrued professional fees as at FY2015, offset by increase in outstanding payments to contractors for renovation of new outlets.

Total equity decreased by $0.9 million from $10.3 million as at FY2015 to $9.4 million as at 3Q2016, attributable mainly to payment of final dividend of $0.9 million and purchases of treasury shares of $0.6 million, offset by profit reported during the financial period. The Group's net asset value per share stood at 3.34 cents as at 3Q2016.

Commentary

The Group is exploring new retail concepts and taking the opportunity to consolidate and streamline our brands while looking for prime locations within Singapore and overseas for expansion. As part of the effort, the Group has carried out an evaluation of under-performing outlets, retaining and re-focusing those with the potential to turnaround and exiting those which are no longer in line with the Group's targets.

The Group will open an outlet with the new "Teahouse" or "茶楼" concept at Changi Airport Terminal 1 in the fourth quarter.

The Group has been informed that the lease for the Soup Restaurant outlet at Raffles Hotel will be terminated in the first quarter of next year due to the hotel undergoing massive renovations.

At the same time, the Group will continue to tighten costs control and improve its productivity. The food processing and distribution business remains focused on its core strategies to assist the Group through procurement sourcing and management, as well as widening its distribution networks for its fast-moving consumer goods.