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Koufu continues to face Covid headwinds in business update

Goola Warden
Goola Warden11/24/2021 06:00 PM GMT+08  • 3 min read
Koufu continues to face Covid headwinds in business update
Koufu announced it still faces challenges in a business update on the impact of Covid
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Koufu Group announced in a business update on Nov 24, that its total revenue on a same stores basis excluding new outlets decreased by 20% for the period July 1, 2021 to October 30, 2021 (the company has a Dec year end) as compared to the same period in 2019 (pre-Covid levels). The company said it expects further impairment losses on trade receivables, property, plant and equipment as well as right-of-use-assets on non-performing outlets to be recognized in 2H2021 (for the six months to Dec 31, 2021).

See: Maybank Kim Eng initiates 'buy' on Koufu Group with TP of 78 cents

While the company's food outlets have resumed its dining-in services, the high number of daily Covid positive cases and restrictions to 2 vaccinated persons affected footfall at all food outlets including coffee shops. In a business update, Koufu says it has resumed operations of all food outlets except the Grove quick service restaurant (QSR) at Singapore Management University (SMU) and two R&B Tea kiosks at SMU and Far East Square due to low footfalls at these outlets.

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In terms of expansion, Koufu opened a new food court opened at Sun Plaza in 1H 2021, a new coffee shop at the new Koufu Headquarters and three new food courts at Marina Square, Nanyang Technological University and Outram Community Hospital in Q3 2021. The company will also be opening a new coffee shop at Blk 467 Bukit Batok Ave 9 and two food courts at Hougang River Court and Novena Square in 1H 2022. Two new R&B Tea kiosks at Fusionopolis and Sun Plaza, and 3 Dough Culture kiosks at SingPost Centre, Sun Plaza and Oasis Terrace were opened in 1H 2021. Another 1 R&B tea kiosk was opened at Sinopec Petrol Station in Woodlands Ave 5 in 3Q2021. In addition, Koufu has also secured one new Dough Culture kiosk at White Sands and two Grove QSRs at Northshore Plaza and Buangkok Square, and three new Dough Culture kiosks at Jurong East MRT, East Point Mall and Sengkang Grand Mall.

Due to lease expiry, the Group had closed the food court at Cathay Cineleisure and the R&B tea kiosks at Seletar Mall and SingPost Centre in 3Q and Q4 2021 respectively. In addition, the Koufu food court at ITE Central and the 1983 QSR at Jurong Community Hospital were closed in 1H2021.

See also: Second Chance set to report higher 1HFY2023 net profit

Elsewhere, Koufu obtained its Temporary Occupation Permit (TOP) in April 2021 and subsequently relocated its Head Office to the new Integrated Facility.

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