Financials

CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024

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Condensed interim consolidated statement of comprehensive income for the six-months ended 30 September 2024

Condensed interim statement of financial position

(A) Statement of Comprehensive Income

For the period from 1 April 2024 to 30 September 2024 (“1H2025”), the Group’s revenue increased by approximately S$1.6 million or 3.2%. This increase in revenue arose mainly due to higher retail and non-retail sales.

Revenue from retail outlets increased by approximately S$0.5 million or 1.2%. This increase in revenue from retail outlets arose mainly due to incremental revenue from new outlets and an increase in revenue from existing outlets, partially offset by a decrease in revenue from closed outlets.

Revenue from other services, such as delivery, catering services and non-retail sales, increased by approximately S$1.0 million or 19.3%. The increase in revenue from other services arose primarily due to higher delivery sales, corporate catering and non-retail orders and events sales during 1H2025.

The Group’s gross profit margin increased by 3.0% to 69.5% in 1H2025, largely driven by (i) improved food suppliers cost management mainly resulting in the reduction in cost of sales, (ii) effective product pricing management, and (iii) reduction in utilities and production staff costs as a percentage of revenue due to the higher revenue generated for 1H2025.

Other income increased slightly by approximately S$0.1 million or 18.3%. This increase in other income arose due to higher gain on disposal of assets of approximately S$0.2 million and higher government grant income of approximately S$0.1 million , with such increase being partially offset by lower employment grant income of approximately S$0.2 million for 1H2025.

Interest income increased by approximately S$0.2 million due to higher interest rates and an increase in short-term fixed deposits placement.

The increase in selling and distribution (“S & D”) expenses was largely in tandem with the increase in revenue during 1H2025. As a percentage of revenue, total S & D expenses increased slightly from 38.9% to 39.0% for 1H2025.

The increase in administrative expenses was mainly attributable to higher staff costs including higher bonus provision arising from the increase in profit for 1H2025, legal and professional expenses, and expenses for upkeep of motor vehicles for 1H2025.

Finance costs increased slightly by approximately S$0.1 million mainly due to higher interest rates on new and renewed lease liabilities, partially offset by lower interest expenses on bank loans due to repayments for 1H2025.

Other expenses decreased by S$0.3 million mainly due to lower foreign exchange loss pursuant to foreign exchange revaluation of inter-company loans to the Group’s Australian and Malaysian subsidiaries for 1H2025.

The increase in depreciation expenses was mainly due to an increase in depreciation of right-of-use assets associated with new and renewed leases of retail outlets, partially offset by a decrease in depreciation of property, plant and equipment resulting from an increase in fully depreciated assets (comprising the Group’s property, plant and equipment).

The Group’s taxation expenses increased by S$0.1 million mainly due to the increase in profits before tax and lower non-tax deductible items, partially offset by the reversal of deferred tax expenses for 1H2025.

(B) Statement of Financial Position

Non-current assets

The Group’s non-current assets decreased by approximately S$2.3 million mainly due to:

1. a decrease in property, plant and equipment arising from depreciation expenses, which was offset by additions during 1H2025;
2. a decrease in right-of-use assets arising from right-of-use depreciation expenses partly due to outlet closures, which was offset by new and renewed leases entered into during 1H2025; and
3. a decrease in long term deposits arising from reclassification of lease deposits in accordance with the respective lease tenures during 1H2025; which was offset by deposits paid for new outlets and lease renewal.

Current assets

The Group’s current assets increased by approximately S$4.3 million, mainly due to:

1. an increase in cash and bank balances of approximately S$3.8 million. Further details of the changes in the Group’s cash flow are set out in paragraph (C) below;
2. an increase in short term deposits, arising from deposits for new upcoming outlets and reclassification of lease deposits in accordance with the respective lease tenures; offset by refund of deposits from closed outlets; and
3. an increase in prepayments, arising from an increase in annual insurance premium, software maintenance agreements and new renovation contracts entered into during 1H2025; partially offset by,
4. a decrease in trade and other receivables due to credit sales settlement from corporate customers; and
5. a decrease in inventories attributed to improved stock management efficiency.

Current and non-current liabilities

The net decrease in the Group’s current and non-current liabilities of approximately S$3.0 million was mainly due to:

1. a decrease in trade and other payables of approximately S$1.0 million, mainly arising from the payment of accrued employee bonus during the period;
2. decrease in liabilities pertaining to bank loans and finance leases, mainly due to repayments made during 1H2025, partially offset by new finance lease secured for the purchase of vehicles;
3. a decrease in lease liabilities mainly due to lease repayment, which was offset by new lease commitments during the period; and
4. a decrease in deferred tax mainly due to the reversal of temporary differences during the period.

Net working capital

The Group had a positive net working capital of approximately S$28.2 million as at 30 September 2024, compared to a positive net working capital of approximately S$23.0 million as at 31 March 2024.

(C) Statement of Cash Flows

In 1H2025, the Group generated an operating profit before working capital changes of approximately S$14.3 million. Net cash generated from operating activities, inclusive of working capital changes and tax paid, amounted to approximately S$11.6 million in 1H2025.

In 1H2025, net cash from investing activities amounted to approximately S$0.2 million. This was mainly due to proceeds from disposal of motor vehicles and interest income received from short-term fixed deposits for 1H2025, partially offset by renovation works for new outlets and the acquisition of motor vehicles, plant and equipment for 1H2025.

Net cash used in financing activities amounted to approximately S$8.0 million in 1H2025. This was mainly due to the distribution of dividends amounting to approximately S$1.2 million during 1H2025, repayment of lease obligations (inclusive of lease interest) of approximately S$5.9 million, and repayments of bank loans and finance lease during 1H2025.

Commentary

The Group observes that inflationary pressures persist, particularly with rising raw materials, labour, and rental expenses. The ongoing manpower shortage in the retail sector remains challenging, while near-term retail demand appears muted.

To navigate this period of sustained inflation, the Group will maintain its current strategies, focusing on reducing operating costs, enhancing gross margins, and optimising operations to manage manpower constraints. Additionally, the Group is actively pursuing non-retail revenue sources, such as business-to-business sales. The Group is also exploring opportunities to increase its presence in strategic, high-traffic locations, such as transport hubs. The Group remains open to synergistic opportunities that enhance our operational efficiency and/or our business-to-business sales and aims to expand our logistics and manufacturing capabilities.