SINGAPORE (May 14): Jumbo Group’s 2Q19 earnings have increased by 18.4% to $5.1 million, compared to $4.3 million in 2Q18.

This brings 1H19 earning to $7.5 million, 18.0% higher than $6.4 million in 1H18.

However, revenue for the second quarter ended March was 1.4% lower at $41.3 million from $41.8 million in the previous year, due to lower revenue from the group’s operations in China. But the decrease in revenue was partially offset by higher revenue from the Singapore operations and franchises.

Since cost of sales saw a steeper decline of 4.7% compared to the revenue drop, 2Q19 gross profit came in at $26.6 million, 0.5% higher than $26.5 million in 2Q18.

Gross profit margin was higher at 64.6% in 2Q19 as compared to 63.4% in 2Q18 due to the closure of underperforming outlets in FY18 and 1H19 coupled with higher franchise income.

Employee benefit expenses fell 3.1% y-o-y to $12.5 million, while operating lease expenses were 3.4% lower y-o-y at $3.6 million and other operating expenses dropped 10.9% y-o-y to $3.6 million.

As at end-March, the group’s cash and cash equivalents stood at $46.0 million.

Jumbo has declared an interim cash dividend of 0.5 cents per share, which will be payable on June 4.

On the outlook, the group expects to face headwinds such as operating cost pressures and keen competition. Despite this, the group believes that it will be able to navigate these challenges and remain confident that its business will remain stable in the next 12 months.

Meanwhile, operations in Singapore are expected to continue to form the bedrock of earnings growth, and the group looks forward to strengthening its foothold in terms of seafood dining options with the recently opened JUMBO Seafood restaurants at ION Orchard and Jewel Changi Airport respectively; and Zui Yu Xuan Teochew Cuisine restaurant and Chao Ting Teochew Pao Fan outlet at Far East Square.

The group expects its first Jumbo outlet in South Korea to begin operations in 3Q19. And plans to open two more Tsui Wah outlets in Singapore and Ng Ah Sio Bak Kut Teh outlets in China and Taiwan.

Ang Kiam Meng, group CEO and executive director of Jumbo says, “Revenue from our Singapore operations and franchises have grown steadily. This underscores the success of our expansion plans and the appeal of our various brands under our portfolio. Moving forward, we will continue to take a calibrated approach on our expansion strategy in our pursuit for quality growth in the region.”

Shares in Jumbo closed 1.25% higher on Tuesday at 40 cents.