SINGAPORE (Feb 14): Old Chang Kee reported 3Q19 earnings of $1.5 million, rising 24.6% y-o-y from $1.2 million on the back of higher revenue and lower cost of sales.
Revenue for the quarter grew 3.8% to $23.1 million from $22.2 million a year ago due with 2.8% higher revenue from retail outlets, with increased contributions from existing outlets as well as revenue from new outlets.
This was however offset in part by the absence of revenue from closed outlets as well as those temporarily closed for renovations.
As at end-2018, Old Chang Kee operated a total of 88 outlets in Singapore as opposed to 92 outlets as at end-2017.
Revenue from other services such as export sales, events, delivery and catering services increased by 66.2% due to export sales to the group’s joint venture the UK, on top of higher events and delivery sales.
Cost of sales fell by 6.1% to $8.3 million due to improved food cost management, but was partially offset by higher manpower costs for the quarter.
In all, gross profit margin grew to 64.1% in 3Q19 from 60.4% a year ago, due to improved manpower efficiencies and food cost management in the latest quarter under review.
As at end-Dec 2018, cash and cash equivalents stood at $13.9 million, up from $11.1 million in the same period a year ago.
Going forward, the group says it will maintain its efforts to drive operational efficiencies and enhance its brand positioning, while continuing to fine-tune its product offerings to adapt to the UK market.
While it notes that its first flagship outlet in Convent Garden – London, UK, has “generated many positive reviews”, Old Chang Kee highlights that challenges such as high manpower costs remain.
In Singapore, the group is expecting rental, labour and raw material costs to remain high over the next reporting period (4Q19) as well as over the next twelve months, and believes the labour market will continue to remain tight.
Shares in Old Chang Kee closed flat at 76 cents on Thursday.