Singapore’s Big Loser for the Week

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Tung Lok Restaurants (2000) Ltd. (SGX: 540) has slumped by 18.7% since last Friday to close at S$0.122 today. Given that the Straits Times Index (SGX: ^STI) has gained less than 0.1% in the same time, this makes the company a big loser in Singapore’s market for the week.

The firm owns and manages over 40 restaurants in Singapore, Indonesia, China, Japan and India. It also runs an events catering business.

This month, Tung Lok did a rights issue at a price of S$0.12 for each rights share. For every five shares held by a shareholder, two rights shares could be subscribed. The company expects a total of up to 78.4 million rights shares to be allotted and issued.

The net proceeds from the rights issue,  after deducting related expenses from the gross proceed of S$9.4 million, will be used by Tung Lok for general working capital, paying for expansion of new outlets, and repayment of bank borrowings.

As of 31 March 2014, Tung Lok had total borrowings of of S$8.6 million. The interest rate on the loans ranges from 2% to 5%.

For the financial year ended 31 March 2014 (FY2014), Tung Lok’s revenue declined 4% to S$77.9 million due to loss of sales stemming from the closure and renovations of certain outlets. Lower food & beverage sales from existing outlets also played a role in the top-line decline.

However, an increase in revenue from new outlets and improved sales performance from its catering business had helped prevent a steeper revenue decline.

The company had suffered a net loss of S$6.8 million for FY2014, a drop from the loss of S$3.2 million seen a year ago. The lower revenue had taken its toll on the company’s bottom-line, as had higher operating costs, an impairment loss on property, plant and equipment, and start-up costs incurred by new outlets that were opened.

The F&B outfit had a cash balance of S$11.7 million as of 31 March 2014. That’s an improvement from the cash balance of S$9.3 million seen a year ago.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.