Jumbo Group Ltd’s Latest Earnings: Sales Up, But Not Profit

JUMBO Group Ltd (SGX: 42R) reported in its fiscal third-quarter earnings report for the financial year ending 30 September 2017 (FY2017) on Tuesday. The reporting period was from 1 April 2017 to 30 June 2017.

JUMBO Group may be best known for its namesake seafood restaurants around Singapore. The group has over 20 restaurants in Singapore, China and Japan. JUMBO Group’s set of restaurants includes JPot, Ng Ah Shio Bak Kut Teh, Chui Huay Lim Teochew Cuisine and J Cafe.

You can read more about the Jumbo Group here.  

Financial Highlights

Here’s a rundown on the latest financial figures for the reporting quarter:

1. Revenue rose by 6.4% year-on-year to $34.8 million.

2. Net profit was $3.4 million, down 1.1% compared to the previous year.

3. Earnings per share (EPS) was 0.5 cents.

4. Cash flow from operations for the second quarter was $2.95 million with capital expenditure at $0.6 million. The restaurant operator generated free cash flow of $2.35 million. A year ago, JUMBO Group had free cash flow of $2.67 million.

5. As of 30 June 2017, JUMBO Group had $48.1 million in cash and equivalents and no debt. A year ago, the restaurant owner had $54.1 million in cash and equivalents and $714,000 in debt.

In summary, Jumbo Group Group’s topline expanded but bottomline slipped. The restaurant operator registered free cash flow and maintained a clean balance sheet.

Operational Highlights

For the quarter, Jumbo Group saw improved operations in Singapore and China. 

The Group also provided the following statement as 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 pressure on operating costs and keen competition. Nonetheless, the Group will continue to leverage on its brands and talents to stay competitive, strengthen and broaden its portfolio of brands for sales and profitability. The Group will also continue to focus on cost rationalisation and improving work flow processes, manpower utilisation and information technology applications to increase productivity, efficiency and lower operating costs.

The Group plans to expand its brands to other major cities in Asia and pursue franchising opportunities to diversify and grow its business offerings. Plans are underway to establish more franchised restaurants in the next 6 months.

The Group will also continue to explore suitable opportunities to expand its network of F&B outlets and business through the opening of new outlets, acquisitions, joint ventures and strategic alliances with partners, who can strengthen its market position and add value to its existing business. The Group’s first JUMBO Seafood restaurant in Beijing, PRC began operations on 12 July 2017.”

Foolish Takeaway

At its closing price on Tuesday of $0.59, Jumbo Group Group traded at around 23 times trailing earnings with a 3.7%.

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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.