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What Investors Need To Know About The Latest Results of Old Chang Kee Ltd

Old Chang Kee Ltd (SGX: 5ML), one of Singapore’s favourite curry puff makers, released its financial results for the six months ended 30 September 2014 (1H 2015) yesterday.

Increased staff costs and rental expenses mainly caused a 30.8% year-on-year slump in net profits. For 1H 2015, net profit came in at S$2.6 million as compared to S$3.7 million exactly a year ago.

Total revenue increased 1% year-on-year to S$35.2 million, mainly due to increased revenue from other services such as delivery and catering services, which increased 35.6% year-on-year. The increase in revenue for other services was mainly attributable to more catering done for government organisations.

The bulk of the total revenue came from the retail division, which only increased marginally from  S$34.3 million last year to S$34.5 million for the latest period, an uptick of 0.5% year-on-year. The better performance was due to incremental revenue from new outlets, partially offset by absence of revenue from closed outlets and lower revenue from existing outlets.

The signature puff products remained the major contributor to the total revenue, accounting for around 30.9% of the revenue, as compared to approximately 31.7% last year.

As of 30 September 2014, the firm had a total borrowing of S$6.4 million and a cash balance of S$20.9 million. Six months ago, the figures were at S$4.1 million and S$20.4 million respectively.

Old Chang Kee had a total of 80 outlets under its belt, as of end September, compared to 79 outlets exactly a year ago. Other than the main Old Chang Kee stores, the company also has sub-brands such as Mushroom, Take 5, Pie Kia, and Dip N Go.

Going forward, Old Chang Kee said that cost pressures in terms of rental, labour and raw materials will remain high, with the labour market continuing to remain tight. Its new factory facilities are currently undergoing renovations and once they are finished, the facilities will help to grow the company further, both locally and regionally. No further mention was made on how the firm aims to grow further regionally. It would have been good if the management shed some light on this during the results announcement.

The company has declared an interim dividend of 1.5 Singapore cents per share. The shares last changed hands at S$0.88 on Friday.

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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.