JUMBO Group Ltd’s Latest Earnings: What Investors Need to Know

JUMBO Group Ltd (SGX: 42R) is a food and beverage (F&B) establishment with 15 F&B outlets in Singapore and 4 F&B outlets in China.

On Friday, the firm announced its financial results for the financial year ended 30 September 2017 (FY2017). Here’s a quick rundown of the financial figures from the announcement:

1. Revenue for FY2017 grew 6.1% year-on-year to S$145.1 million. The increase was mostly due to an overall increase in revenue from JUMBO’s operations in both Singapore and China. The full year revenue contribution from its third JUMBO Seafood restaurant in Shanghai, China, helped to grow revenue in the country.

2. However, net profit fell 6.7% to S$14.5 million, mainly due to higher operating expenses.

3. Diluted earnings per share for the year was 2.3 Singapore cents, down from 2.4 cents in FY2016.

4. As of 30 September 2017, JUMBO had S$51.3 million in cash balance and no bank borrowings. In comparison, as of 30 September 2016, it had S$59.3 million in cash and cash equivalents, and S$0.6 million in total debt. Even though the net cash position was lower for FY2017, the balance sheet remained strong.

5. Cash flow from operations was at S$11.6 million and S$5.9 million was spent on capital expenditure for the year. Therefore, the F&B outfit had S$5.7 million in free cash flow in FY2017, a fall from S$12 million in free cash flow raked in a year ago.

All-in-all, it was a mixed bag of results for JUMBO Group.

The board of directors has proposed a final dividend of 0.5 Singapore cent per share and a special dividend of 0.7 cent per share for the fourth quarter. Including the interim dividend of 0.5 cent per share already paid out in the second quarter, a total dividend of 1.7 cents per share for FY2017 would have been paid out, unchanged from last year. The latest payout represents around 75% of FY2017’s net profit.

In the fourth quarter of FY2017, the firm established a new branch office in Shanghai, China, in connection with the opening of its fourth JUMBO Seafood outlet. The outlet is set to open next month. In Taiwan, the company had entered into a joint venture agreement with a local strategic partner, Baipin, to open at least eight JUMBO Seafood outlets in the country.

Ang Kiam Meng, the group chief executive officer and executive director of JUMBO, said:

“We are highly encouraged by the progress we have made in growing our “JUMBO Seafood” brand in the PRC market. North Asia’s sizeable and fast-growing consumer market will be a key growth driver for JUMBO going forward. We expect that the region’s share of contribution towards the Group’s revenue will continue to grow with the opening of our new Shanghai outlet and Taiwan franchise.”

Shares of the F&B firm are going at S$0.565. This translates to a trailing price-to-earnings ratio of 25 and a dividend yield of 3%.

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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.