We’ve come to the tail-end of the earnings season.
As is common with every earnings season, there will be some real companies posting growth, some posting mixed numbers, and some experiencing declines.
So, which are the businesses that have recently shown growth? Let’s look at two of them:
1. Japan Foods Holding Ltd (SGX: 5OI) owns a chain of restaurants in Singapore. As of 31 December 2017, the company has 48 restaurants in Singapore under various brands, and 22 restaurants outside of Singapore in Malaysia, Vietnam, Hong Kong, and China. The company’s restaurant brands include Ajisen Ramen, Menya Musashi, and Osaka Ohsho.
For the third quarter for the financial year ending 31 March 2018 (FY2018), revenue rose by 11.4% year-on-year to S$18.7 million. Along with it, gross profit was up 11.7% year-on-year. With that, net profit jumped 73.5% year-on-year to S$2.5 million. Japan Foods had a clean balance sheet with cash and bank balances at S$20.5 million, and no borrowings as of 31 December 2017.
Mr Takahashi Kenichi, Executive Chairman and CEO of Japan Foods, summarised the latest quarterly performance:
“That we were able to achieve strong sales and profit performance despite the lower number of restaurants is testament to the strength of our brands and the effectiveness of our dynamic restaurant portfolio management.
“We are particularly pleased with our ‘Shitamachi Tendon Akitmitsu’ brand, which was launched in July 2017 at Plaza Singapura. Its performance has been so encouraging that we have since added four more stores in Northpoint City, Vivo City, Westgate and the latest one at Changi City Point which opened in January 2018. Our flagship ‘Ajisen Ramen’ brand has also performed strongly partially due to higher same-store sales following the revamp of some outlets into the ‘Den by Ajisen Ramen’ brand.”
2. Another company posting positive results was Singapore Post Limited (SGX: S08) which is better known as SingPost.
As a quick introduction, Singapore Post is a mail and logistics services provider. It organises its business into three main segments: Postal, Logistics, and eCommerce.
For its third quarter earnings update for its fiscal year ending 31 March 2018 (FY17/18), revenue rose 11.7% year-on-year to S$412.8 million. Operating profit was up 23.7% to S$46.1 million year-on-year. Along with it, earnings per share (EPS) jumped 35% year-on-year to 1.73 cents.
SingPost had cash and bank balances of S$284.3 million, and debt of S$235.3 million, as of 31 December 2017, giving it a net cash position of S$49 million. For the first nine months of FY17/18, SingPost generated free cash flow of S$93.6 million, up from a negative S$11.6 million last year, benefitting from a reduction in capital expenditure.
Mr Paul Coutts, Group Chief Executive Officer, added some words on the quarter:
“Good execution across the Group saw us capture the benefits of a festive peak season in which eCommerce volumes made new records globally. During the quarter, revenue from eCommerce-related activities rose 26.4 per cent to S$247.8 million, hitting 60.0 per cent of total revenue. We will move ahead with our strategy to become a leading postal and eCommerce logistics company to realise the full potential of our transformation.”
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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 Lawrence Nga doesn’t own shares in any companies mentioned.