10 Quick Things That Investors Should Know About Japan Foods Holding Ltd’s FY2018 Results

Recently, Japan Foods Holding Ltd (SGX: 5OI) released its 2018 full-year results.

As a quick introduction, Japan Foods is a Japanese restaurant chain in Singapore, operating a number of brands such as “Ajisen Ramen”, “Osaka Ohsho” and “Menya Musashi”. It has also expanded beyond Singapore to Malaysia, Vietnam, Hong Kong and Mainland China.

Here are 10 things that investors should know from its latest results:

1. Revenue for the year grew by 3.6% year-on-year to a record high of S$65.5 million. The growth in revenue was driven mainly by Ajisen Ramen and Menya Musashi.

2. Gross profit climbed 3.8% year-on-year to S$57.7 million in FY2018.

3. The company’s gross margin improved marginally from 84.9% in FY2017 to 85.0%. The improvement in margin was driven by bulk purchase discounts, raw material costs control, material usage efficiency and product pricing strategy.

4. Net profit for the year jumped 24.0% year-on-year to S$5.8 million.

5. Similarly, Japan Foods’ earnings per share (EPS) increased by 24.3% to 3.33 cents.

6. In FY2018, Japan Foods generated operating cash flow of S$9.3 million, down from S$11.3 million in the previous year. The decline in operating cash flow was driven mainly by negative working capital movements.

7. Japan Foods had no borrowings, as of 31 March 2018, while its cash and bank balances stood at S$21.9 million. A year ago, Japan Foods had no borrowings while its cash and bank balances was S$20.2 million.

8. On 14 February 2018, Japan Foods announced it had entered into an agreement with PT Arena Gourmet and PT Menya Musashi Indonesia to operate restaurants under the Menya Musashi brand in Indonesia via a joint venture.

9. The company proposed a final dividend of 1.30 Singapore cents per ordinary share, which together with the interim dividend of 0.80 Singapore cents, brings the total dividend declared for the year to 2.10 Singapore cents.

10. Takahashi Kenichi, Executive Chairman and CEO of Japan Foods, commented:

“I am very pleased that Japan Foods has set a new revenue record despite an increasingly challenging operational environment as it reflects the success of our ongoing restaurant portfolio management strategy in driving revenue. We will continue to monitor the sales of individual stores carefully in order to maintain a healthy topline and sustainable bottomline.”

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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.