10 Quick Things Investors Should Know About JUMBO Group Ltd’s Latest Earnings

Last week, JUMBO Group Ltd (SGX: 42R) released its second quarter earnings update for its fiscal year ending 30 September 2018. As a quick introduction, JUMBO is a restaurant operator that is perhaps most famous for the chili crab served in its JUMBO Seafood chain of seafood restaurants.

Here are 10 things investors should know about JUMBO’s latest results:

1. Revenue for the reporting quarter improved by 6.0% year-on-year to S$41.7 million.

2. Gross profit for the quarter increased by 5.0% to S$26.4 million compared to a year ago, driven mainly by the aforementioned revenue growth.

3. The gross profit margin dipped from 63.9% a year ago to 63.3%.

4. But, net profit for the quarter fell by 26.2% year-on-year to S$4.2 million.

5. Similarly, JUMBO’s earnings per share declined 22.2% to 0.7 cents.

6. In the reporting quarter, JUMBO generated operating cash flow of S$1.0 million, up from S$0.3 million last year.

7. As of 31 March 2018, the company had cash and bank balances of S$44.5 million, and zero debt.

8. In March 2018, JUMBO entered into a joint venture to establish and operate Hong Kong-style “Cha Chaan Teng” under the “Tsui Wah” brand in Singapore. The first Tsui Wah Cha Chaan Teng is expected to open in June 2018. Also, JUMBO’s sixth JUMBO Seafood restaurant in China is expected to commence operation in Xi’an by June 2018.

9. Jumbo declared an interim dividend of 0.5 cents per share for the quarter.

10. In its earnings update, JUMBO gave some useful comments on its business outlook:

“As the Group continues to grow its core operations and strengthen its organisation structure and depth for its planned expansion in Asia, performance may be varied as human capital, gestation period for new outlets and operational costs will be some of the key challenges faced. Pre-operating expenses and promotional expenses for new outlets and the performance of new outlets during the initial gestation period will also affect the Group’s performance. These have been reflected in the Group’s Q2 FY2018 results.

Nevertheless, the Group will continue to focus on cost efficiency and improving work flow processes, manpower utilisation and application of information technology systems to increase productivity, efficiency and lower operating costs.”

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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.