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Review of Performance
Revenue and Profitability
The Group’s revenue for the financial period ended 31 March 2018 (“3M2018”) was $11.1 million, an increase of $0.5 million or 5.0% as compared to $10.5 million for the financial period ended 31 March 2017 (“3M2017”). The increase was attributable to an increase in revenue from existing outlets of $0.9 million and online delivery services of $0.5 million, offset by a decrease in revenue from the closure of outlets of $1.1 million. Revenue for the food processing, distribution and procurement services segment has also increased by $0.2 million.
Other income decreased by 11.5% mainly related to a decrease in government grants received for the Wage Credit Scheme and Special Employment Credit.
Purchases and other consumables were maintained at approximately 22.0% of revenue as compared to 3M2017. Employee benefits expense decreased by $0.1 million or 1.3% in 3M2018 mainly due to the closure of outlets.
Other expenses decreased marginally by 0.8% in 3M2018. The increase in sales commission, which is associated with online delivery services, was offset against a decrease in operating lease expenses as a result of the closure of outlets.
As a result, the Group’s profit before income tax doubled to $0.9 million or increased by 102.0% as compared to 3M2017. Earnings per share stood at 0.27 cents in 3M2018.
Review of Financial and Cash Flow Position
Non-current assets decreased by $0.4 million from $3.8 million, as at 31 December 2017 (“FY2017”), to $3.4 million as at 31 March 2018 (“1Q2018”), mainly due to depreciation and amortisation expenses.
Current assets increased by $0.9 million as compared to FY2017 mainly due to an increase in cash and cash equivalents of $0.4 million, increase in trade and other receivables of $0.4 million and increase in inventories of $0.1 million. The increase in cash and cash equivalents was attributable mainly to net cash from operating activities. Trade and other receivables increased mainly due to the increase in receivables of $0.2 million which is associated with the increased revenue and increase in prepayment and deposits of $0.2 million which is associated to the signing of new lease agreements.
Current liabilities decreased by $0.3 million mainly due to a decrease in trade and other payables of $0.4 million as a result of payments for staff bonuses and expenses accrued as at FY2017, partially offset by an increase in current income tax payable of $0.1 million.
Total equity increased by $0.7 million from $10.3 million, as at FY2017, to $11.0 million as at 1Q2018, attributable mainly to the profit reported during the financial period. The Group’s net asset value per share stood at 3.94 cents as at 1Q2018.
The Group continues to focus on strengthening our brands with plans for a cautious expansion of our portfolio of outlets in Singapore. The Group will also strive to bring our food offerings to more customers through online delivery platforms from all our outlets. At the same time, the Group will continue to manage the operations of our restaurants more effectively with productivity measures with the intention to better serve our customers.
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 consumer goods and ready meals through the central kitchen located in Changi Prison Complex which was set up in the last quarter of FY2017.