Neo Group’s First Overseas Foray

neogroup logo Neo Group Limited (SGX: 5UJ), an events caterer that has the top spot in the catering business locally, has ventured overseas for the first time since going public last year.

It has signed a 5-year licence agreement with P.T. Umi Sushi Indonesia, an Indonesian company to expand its footprint and will receive monthly licence fees based on sales. One “umisushi” food retail store has already taken off in Kota Kasablanka Mall in Jakarta, Indonesia on 10 July 2013. Two other “umisushi” stores will be opened within the next two years, also in Jakarta.

Currently, Neo Group has 19 “umisushi” food outlets in Singapore. The “umisushi” brand was the Neo Group’s main growth driver in Financial Year 2013, with revenue rising by 31.4% to $10.96 million year-on-year.

Founder, Chairman and CEO, Mr Neo Kah Kiat, said, “It was always our intention to replicate the “umisushi” model overseas as we believe that the underlying concept of “quick service food” has wide-spread appeal among the masses, particularly given the busy lifestyles of city dwellers today. With an approximate population of 10.2 million, Jakarta is a bustling city that has seen increasing urbanisation and rising affluence over the years. We are excited about the opportunities that this market presents for us.

On top of its march into Indonesia, Neo Group is also working towards achieving its target of opening 30 “umisushi” retail stores in Singapore by 2016. It is targeting to open three more “umisushi” outlets by September 2013 and another two more outlets by March 2014.

It pays to see how this overseas venture will pan out in the FY2014’s results. Mr Neo owns a huge chunk of the company at 75.24% of the total shares outstanding. Neo Group is currently trading at a PE ratio of 21 and is yielding 3.4%.

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