SINGAPORE (May 30): Old Chang Kee saw FY18 earnings double to $5 million from $2.4 million in FY17 on improved gross margins and revenue.

A final dividend of 1.5 cents has been declared for the year.

Revenue for FY18 grew 9.1% to $85.5 million from $78.3 million in FY17 on the back of contributions from both new and existing retail outlets, with Old Chang Kee’s signature puff products remaining the major contributor as it accounted for 30.1% of total revenue for FY18.

The group’s topline was further boosted by higher revenue from other services as a result of higher events and catering sales.  

Gross profit margin however fell to 61.1% in FY18 from 63.3% in the previous year, mainly due to higher food costs compared to the previous year.

Selling and distribution expenses grew in line with the higher revenue, as did administrative expenses, by 9.1% and 1.4% to $35.3 million and $11.8 million, respectively.

Finance costs grew to $0.3 million from $0.2 million a year ago due to increased loans taken, including those to finance the construction and renovation of factory facilities.

Other expenses however fell 60.2% to $1.8 million from $4.5 million in FY17, mainly due to the impairment of unquoted shares and the absence of revaluation deficit for the group’s Singapore and Malaysia factory facilities which were booked in FY17.

As at end-March, the group operated a total of 90 outlets in Singapore, compared to 89 outlets in the same period a year ago.

Cash and cash equivalents stood at $12.8 million compared to $15.6 million a year ago.

In its outlook, Old Chang Kee says it expects its first flagship outlet in London, UK, to generate new revenue streams and uplift its brand positioning post its opening in June 2018.

The group however expects rental, labour and raw material costs to remain high in the near-term term on top of tight labour market conditions, and says it will continue to focus on improving its gross margins and revenues going forward.

Shares in Old Chang Kee closed 1 cent lower at 76 cents on Wednesday.