Singapore “Flyer” Of The Week: Hozen Group

brand_logo_hosenThis week’s “Flyer” spotlight falls on Hozen Group (SGX: 5EV). Shares in the food producer, which puts fruit and vegetables into tins under the Hozen marque, jumped 7.5% to S$0.07 ahead of interim results next month. It also cans seafood under the Fortune brand.

The Catalist-quoted company, which reports figures twice yearly, said in February that annual revenues ticked up 3%. However, pre-tax profits slumped 57% on higher administrative expense and distribution costs.

Hozen, which is valued at S$24m, is what some might describe as a steady but unremarkable business. Since 2005, revenues have increased around 1% a year. Meanwhile, gross profits have risen around 4%.

However, after deducting operating expenses, which have been rising at roughly 7% a year, there is not much left over on the bottom line. Net income last year was barely changed from seven years ago. If not for a small exchange-rate gain the company would have been profitless.

By its own admission, Hozen is operating in a challenging environment. But in the Fast Moving Consumer Goods (FMCG) sector, it doesn’t take much to improve performance. A small increase in sales volume, a small increase in price and a small cut in costs can have a disproportionate impact on the bottom line. We’ll find out next month if Hozen has been able to make those baby-steps to improve its bottom line.

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