SINGAPORE (Aug 28): ST Group Food Industries Holdings reported FY19 earnings ended June of A$1.95 million ($1.8 million), down 28.4% from FY18 on higher costs expenses despite higher revenue.

This is ST Group Food’s first full-year results announcement after its Catalist listing in July which provided it with fresh funds for expansion.

See: ST Group launches IPO with placement of 30.1 mil shares at 26 cents each

Revenue rose 42.9% to A$52.1 million from a year ago, supported by its “strong positioning as successful master franchisee or master licensee for various brands in its portfolio, in key geographical markets of Australia, New Zealand, Malaysia and the United Kingdom.

ST Group Food has a portfolio of six internationally popular brands, namely, PappaRich, NeNe Chicken, Gong Cha, Hokkaido Baked Cheese Tart, Ippudo and iDarts, as well as two of its brand concepts, Pafu and Kurimu.

The F&B retail sales segment continued to be the key growth driver, mainly due to higher contributions from existing outlets as well as contributions from new outlets opened during the financial year. During FY19, the group increased the number of company-owned outlets to 41 as at June 30 from 24 as at June 30, 2018. As at Aug 20, the total number of outlets stood at 113.

The group’s supply chain sales, derived from the sale of F&B ingredients and supplies to its sub-franchisees and sub-licensees, expanded 20.6% to A$9.5 miillion.

Franchise revenue grew 57.2% to A$7.1 million due to a rise in project income linked to renovation and fitting-out of new outlets for sub-franchisees ad sub-licensees, and royalty income, in line with the increase in the number of sub-franchised and sub-licensed outlets.

However, FY19 saw IPO expenses of A$2.9 million. Purchases of inventories rose 41.5% to A$14.2 million while rental on operating leases rose 41.7% to A$5.5 million and staff costs rose 46.4% to A$16.3 million.

Excluding IPO expenses, group’s core profit after tax and minority interests would have increased by 46.5%.

In its outlook statement, ST Group Food says it opened its first Kurimu outlet in July which has been well-received by consumers. A second outlet is expected to open in November.

In June, it launched its first Gong Cha outlet at City Tower, Manchester, England.

The group has signed contracts to open another nine outlets across four brands by Dec, including its first Ippudo oulet in New Zealand in Oct.

In July, the group also secured exclusive rights to the NeNe Chicken brand in New Zealand as part of its strategy to expand its business in the geographical market, where the group already has businesses operating under the PappaRich, Gong Cha and Hokkaido Baked Cheese Tart brands.

The group’s central kitchen in Australia will continue to support the outlets in the group’s network across Australia and New Zealand.

Shares in ST Group Food last traded at 28 cents, above its IPO price of 26 cents.