Jumbo Group Ltd’s Latest Earnings: Serving Up Some Tasty Growth

Last Friday, Jumbo Group Ltd  (SGX: 42R) reported its second-quarter earnings for its fiscal year ending 31 September 2016 (FY2016). The reporting period was for 1 January 2016 to 31 March 2016.

Jumbo Group may be best known for its namesake seafood restaurants located around Singapore. The company currently has interests in over 20 restaurants in Singapore, China and Japan. Jumbo Group’s set of restaurants includes other brands such as JPot, Ng Ah Shio Bak Kut Teh and Yoshimaru Ramen among others.

You can read more about Jumbo Group in here.

Financial highlights

The following’s a rundown on some of the latest financial figures from Jumbo Group:

  1. For the fiscal second-quarter, revenue rose by 18.5% year-on-year to $39.6 million.
  2. Net profit was up by over 21% compared to the previous year. Profit for the reporting quarter finished at $5.9 million.
  3. The profit attributable to shareholders jumped by 49% to S$5.83 million, driving a 50% spike in earnings per share (EPS) to 0.9 cents.
  4. Cash flow from operations for the fiscal second-quarter was $5.4 million with capital expenditure coming in at $1.2 million. This gives rise to positive free cash flow of $4.2 million, up from the $2.6 million recorded in the second-quarter of FY2015 ($3.9 million in cash flow from operations and $1.3 million in capex).
  5. As of 31 March 2016, Jumbo Group had $51.5 million in cash and equivalents and less than $1 million in debt. This compares with the $60 million in cash and equivalents and less than $1 million in debt seen at the end of the last sequential quarter.

In summary, Jumbo Group served up tasty growth for both its top-line and bottom-line in the reporting quarter. Meanwhile, the restaurant operator also brought in positive free cash flow and maintained a strong balance sheet.

Operational highlights and a future outlook

Jumbo Group’s revenue grew due to contributions from two new Jumbo Seafood restaurants in Shanghai, China. The company also provided the following statement for its outlook for the future:

“The food and beverage (“F&B”) industry is expected to continue to be challenging, given the weak economic outlook coupled with an increase in manpower and rental costs.

The Group will continue to focus on cost rationalization and improving workflow processes, manpower utilization and information technology applications to increase productivity and efficiency and lower operating costs.

Barring any unforeseen circumstances, the Group expects to continue to grow its business and remain profitable for FY2016.”

A third seafood restaurant was also opened in China in January this year. Jumbo will be looking to expand its network of F&B restaurants either through partnerships, acquisitions, or the opening of new outlets.

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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 Chin Hui Leong doesn’t own shares in any companies mentioned.