SINGAPORE (Nov 21): Jumbo Group, the seafood restaurant operator, reported FY18 earnings of $11.0 million, 23.8% lower compared to the earnings of $14.5 million in FY17.

Total revenue increased 5.5% to $153.0 million for FY18 mainly due to an increase in revenue contribution from Jumbo’s Singapore and China operations.

Revenue from the Singapore operations increased by $2.1 million, while revenue from its outlets in the China increased by $5.8 million, mainly due to full year revenue contributions from two new Jumbo Seafood restaurants in Shanghai and Beijing as well as four months revenue contribution from a new Jumbo Seafood restaurant in Xi’an.

Cost of sales, which comprises raw materials and consumables used, increased by 7.4% to $57.1 million in FY18, in line with the increase in the group’s revenue.

Gross profit increased by 4.4% to $96 million in FY18 due to the increase in revenue. Gross profit margin was lower at 62.7% in FY18 compared to 63.4% in FY17.

Other income increased by 31.6% to $3.6 million in FY18, largely due to the write back of impairment loss on investment in associates amounting to $0.5 million and an increase in franchise income of $0.4 million.

In FY18, there was an increase in manpower for the new Jumbo Seafood restaurants in China, and an overall increase in headcount in the Singapore and China corporate offices to support the group’s regional expansion, which resulted in employee benefits expense increasing by 13.7% to $47.5 million in FY18.

Operating lease expenses and utilities expenses increased by 3.0% and 12.1% to $14.3 and $3.7 million in FY18, respectively.

These were mainly due to the new Jumbo Seafood restaurants and the expansion of the China corporate office. Other operating expenses increased by 16.1% to $15.7 million in FY18 also for the same reasons.

The board of directors of Jumbo has proposed a tax exempt (one-tier) final cash dividend of 0.7 cent per share. Together with the tax exempt (one-tier) interim dividend of 0.5 cent per share, the group will see a total dividend payout of 1.2 cents per share for FY18, amounting to 70% of the group’s FY18 earnings.

In line with its strategy of expanding its F&B business through the opening of new outlets, joint ventures and strategic alliances with partners, the group will continue to explore suitable opportunities to strengthen its competitive edge in its existing business and solidify its market position in the region.

Over the next 12 months, plans are underway for the Group to open 2 new Jumbo Seafood restaurants, one new Teochew cuisine restaurant and at least two more Tsui Wah Cha Chaan Teng outlets in Singapore.

Year to date, shares in Jumbo have fallen to 40 cents from 58 cents.