FINANCIAL STATEMENTS AND RELATED ANNOUNCEMENT FOR THE FIRST QUARTER ENDED 30 JUNE 2018
Consolidated statement of comprehensive income
Review of Performance
The Group's revenue increased from approximately S$20.6 million for the financial period from 1 April 2017 to
30 June 2017 ("1Q2018") to approximately S$22.3 million for the period from 1 April 2018 to 30 June 2018
("1Q2019"), an increase of approximately S$1.8 million or 8.5%.
Revenue from retail outlets increased by approximately S$1.6 million or 7.9% mainly due to revenue
contribution from new outlets and an increase in revenue from existing outlets, partially offset by absence
of revenue from closed outlets.
Revenue from other services, such as delivery and catering services, increased by approximately S$159,000
or 55.8% from S$285,000 to S$444,000, mainly due to higher events and catering sales.
As at 30 June 2018, the Group operated a total of 90 outlets in Singapore as compared to 89 outlets as at 30
Cost of sales and gross profit
Cost of sales decreased by approximately S$149,000 or 1.9% mainly due to better food cost management and
improved manpower efficiencies arising from automation of production processes for 1Q2019.
The Group's gross profit increased by approximately S$1.9 million or 15.2%. The Group's gross profit margin
increased from approximately 60.9% in 1Q2018 to 64.7% in 1Q2019, mainly due to improved manpower
efficiencies and food cost management in 1Q2019.
Other income increased by approximately S$14,000 mainly due to an increase in gain on disposal of motor
vehicles of approximately S$44,000, offset by lower special temporary employment credit scheme income and
government grant income in 1Q2019.
Selling and distribution expenses
Selling and distribution ("S & D") expenses increased by approximately S$739,000 or 8.5% in line with the
increase in revenue. S & D expenses as a percentage of revenue for both 1Q2019 and 1Q2018 remained
relatively constant at 42.1% of revenue.
Administrative expenses increased by approximately S$291,000 or 10.2%. The increase in administrative
expenses was mainly due to an increase in head office staff costs, including staff training expenses and
recruitment expenses, of approximately S$304,000.
The increase in other expenses of approximately S$201,000 in 1Q2019 was mainly due to an increase in
depreciation expenses of approximately S$142,000 arising from depreciation of the new head office at 2
Woodlands Terrace, and foreign exchange loss of S$21,000 in 1Q2019, compared to foreign exchange gain
of S$46,000 for the prior period.
As a result of the above, the proportion of total operating expenses compared to revenue increased from 56.8%
in 1Q2018 to 57.9% in 1Q2019.
Depreciation and amortisation
The increase in depreciation and amortisation expenses of approximately S$247,000 in 1Q2019 was mainly
due to additions of plant and equipment and renovation costs for the completion of the Group's new factory
facility in Singapore and new retail outlets.
Finance costs increased by approximately S$13,000 mainly due to higher interest rates on loan taken for the
construction and renovation of factory facilities.
Share of results of joint venture
The increase was due to initial operating losses of approximately S$44,000 for the joint venture in the United
Kingdom in 1Q2019, compared to start up costs of approximately S$31,000 in 1Q2018.
Profit before tax
The Group's profit before tax increased from approximately S$914,000 in 1Q2018 to approximately S$1.6
million in 1Q2019, an increase of approximately S$660,000 or 72.2%.
The Group's taxation expenses increased by S$80,000 or 32.9% mainly due to an increase in profit for the
current financial period, offset by lower non tax deductible items for the period.
The Group's non-current assets decreased by approximately S$117,000 or 0.3% mainly due to the following:
- depreciation expenses and fixed assets written off of approximately S$1.4 million partially offset by
purchase of motor vehicles, plant and equipment and renovation costs for the Group's new factory facility
and outlets in Singapore during 1Q2019; and
- share of start-up costs for the joint venture of approximately S$44,000 for 1Q2019.
The decrease in non-current assets was partially offset by:
- an increase in investment in unquoted shares of approximately S$186,000 due to fair value adjustment
upon the adoption of SFRS(I) 9 – Financial Instruments; and
- an increase in long term deposits mainly due to top up of lease deposit for lease renewals, partially offset
by reclassification of long term lease deposits to short term lease deposits, in accordance with the
respective lease tenures.
The Group's current assets increased by approximately S$2.1 million or 12.9% mainly due to:
- an increase in cash and bank balances of approximately S$2.5 million mainly due to cash inflow from
operating activities, partially offset by purchase of property, plant and equipment during 1Q2019;
- an increase in amount due from joint venture mainly due to a working capital loan and product sales to the
United Kingdom joint venture of approximately S$282,000; and
- an increase in amount due from associates mainly due to product sales of goods to the Malaysian
associated company of approximately S$72,000.
The increase in current assets was partially offset by a decrease in inventories due to lower bulk purchase and
a decrease in prepayments mainly due to reclassification of equipment from prepayments to property, plant
and equipment upon full payment and receipt of the equipment.
The Group's current liabilities increased by approximately S$915,000 or 7.2% mainly due to the following:
- an increase in trade and other payables mainly due to higher accrued rent and staff cost for the period;
- an increase in provision for taxation mainly due to tax expenses provided for the current period.
The increase in current liabilities was offset by a decrease in finance leases due to repayments during the
The Group's non-current liabilities decreased by approximately S$353,000 or 3.2% mainly due to repayment
of bank loans and decrease in deferred tax liabilities during 1Q2019 partially offset by an increase in finance
leases mainly for the purchase of new motor vehicles.
Net working capital
As at 30 June 2018, the Group had a positive net working capital of approximately S$4.9 million as compared
to approximately S$3.7 million as at 31 March 2018.
In 1Q2019, the Group generated an operating profit before working capital changes of approximately S$3.0
million. Net cash generated from operating activities, inclusive of working capital changes, amounted to
approximately S$4.1 million in 1Q2019.
In 1Q2019, net cash used in investing activities amounted to approximately S$891,000. This was mainly
attributable to additions of plant and equipment and renovation costs for the Group's new retail outlets and
factory facility in Singapore.
Net cash used in financing activities amounted to approximately S$697,000 in 1Q2019. This was mainly due
to loan to joint venture and repayments of bank loan and finance lease liabilities, including interest paid during
Following the completion of the new factory facilities and the commissioning of new factory equipment, the Group is
heartened that its efforts on improving its gross margins and revenues are showing results. These efforts include
continued investment in brand positioning, further expanding its product range including seasonal product launches,
and increasing the production efficiency of its factories. The Group will continue with its efforts to drive operational
efficiencies, and to enhance its brand positioning.
Initial sales results for the Group's first flagship outlet in Covent Garden - London, United Kingdom are encouraging
and the Group will continue to fine-tune its product offerings to adapt to the local market.
On the current operations, the Group expects rental, labour and raw material costs to remain high in the next reporting
period and the next 12 months, and believes that the labour market will continue to remain tight.