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Financials

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Unaudited Financial Statements And Dividend Announcement For The Financial Year Ended 30 September 2017

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Income Statement

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Profit & Loss

A Statement of Financial Position

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Balance Sheet

REVIEW OF THE GROUP'S PERFORMANCE

Revenue

Revenue increased by 6.1% or $8.3 million, from $136.8 million in FY2016 to $145.1 million in FY2017. Revenue from our Singapore operations increased by $2.9 million while revenue from our outlets in the People’s Republic of China (“PRC”) increased by $5.4 million with full year revenue contributions from our third Jumbo Seafood restaurant in Shanghai, PRC.

Cost of sales

Cost of sales which comprised raw materials and consumables used increased by 5.7% or $2.9 million, from $50.3 million in FY2016 to $53.2 million in FY2017, in line with the increase in revenue. Cost of sales as a percentage of revenue remained stable at approximately 37% in both FY2017 and FY2016.

Gross profit

Gross profit increased by 6.3% or $5.4 million, from $86.5 million in FY2016 to $91.9 million in FY2017. Gross profit margin was approximately 63% in both FY2017 and FY2016.

Other income

Other income decreased by 17.6% or $0.6 million, from $3.3 million in FY2016 to $2.7 million in FY2017, largely due to lower government grants resulting from a reduced wage credit scheme payout.

Employee benefits expense

Employee benefits expense increased by 6.4% or $2.6 million, from $39.2 million in FY2016 to $41.8 million in FY2017. This was mainly due to an overall increase in employee headcount and remuneration to support our regional expansion.

Operating lease expenses

Operating lease expenses increased by 16.7% or $2.0 million, from $11.9 million in FY2016 to $13.9 million in FY2017 mainly due to the additional floor space for our new outlets, outlet expansion and new corporate offices in Singapore and Shanghai, PRC.

Depreciation expenses

Depreciation expense increased by 29.9% or $1.1 million, from $3.5 million in FY2016 to $4.6 million in FY2017 mainly due to the additional depreciation for our new outlets and new corporate offices in Singapore and Shanghai, PRC.

Other operating expenses

Other operating expenses increased by 1.1% or $0.2 million, from $13.3 million in FY2016 to $13.5 million in FY2017. Included in other operating expenses were expenses of approximately $1.0 million in relation to the Group’s 30th Anniversary celebrations. These expenses included monthly lucky draws, celebration dinners and gifts.

Income tax expense

Income tax expense increased by 1.8% or $0.1 million, from $2.7 million in FY2016 to $2.8 million in FY2017 mainly due to higher taxable profits in our PRC operations.

Profit after tax

Profit after tax decreased by 4.3% or $0.7 million, from $15.7 million in FY2016 to $15.0 million in FY2017.

Profit attributable to owners of the Company

Profit attributable to owners of the Company decreased by 6.7% or $1.0 million, from $15.5 million in FY2016 to $14.5 million in FY2017.

Review of the group's Financial Position

Current assets

The Group’s current assets decreased by $4.5 million from $66.7 million as at 30 September 2016 to $62.2 million as at 30 September 2017 mainly due to the decrease in cash and cash equivalents.

Non-current assets

The Group’s non-current assets increased by $1.5 million from $19.5 million as at 30 September 2016 to $21.0 million as at 30 September 2017 due to the increase in property, plant and equipment resulting from the establishment of new outlets and new corporate offices in Singapore and Shanghai, PRC.

Current liabilities

The Group’s current liabilities decreased by $4.4 million from $18.9 million as at 30 September 2016 to $14.5 million as at 30 September 2017 mainly due to the decrease in trade and other payables.

Non-current liabilities

The Group’s non-current liabilities decreased by $0.5 million from $0.8 million as at 30 September 2016 to $0.3 million as at 30 September 2017 due to full repayment of bank borrowings.

REVIEW OF THE GROUP'S CASH FLOW STATEMENT

The Group generated net cash from operating activities before changes in working capital of $22.3 million. Net cash used in working capital amounted to $7.8 million mainly due to an increase in trade and other receivables of $3.0 million, resulting from construction-in-progress of our fifth Jumbo Seafood Restaurant in the PRC, rental deposits due to new leases and higher receivables from credit card issuers in line with the increase in revenue, an increase in inventories of $0.4 million and a decrease in trade and other payables of $4.4 million. The Group paid income tax of $2.9 million. As a result, net cash generated from operating activities was $11.6 million.

Net cash used in investing activities amounted to $5.9 million was mainly for the acquisition of property, plant and equipment (relating to the establishment of new outlets, outlet expansion and the acquisition of new equipment for our central kitchen).

Net cash used in financing activities of $13.7 million was mainly due to the payment of dividend amounting to $14.1 million to the owners of the Company and full repayment of bank borrowings of $0.6 million, partially offset by capital contribution of $1.0 million from non-controlling interest in a subsidiary. As a result, net cash and cash equivalents decreased by $8.0 million in FY2017.

Commentary on current year prospects

The food and beverage (“F&B”) industry is expected to continue to be challenging due to pressure on operating costs and keen competition.

The Group will 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. This is especially pertinent in light of reduced government grants such as wage credit scheme and productivity and innovation credit scheme.

The Group will continue to explore suitable opportunities to expand our network of F&B outlets and business through the opening of new outlets, acquisitions, joint ventures or strategic alliances with partners who can strengthen our market position and value add to our existing business.

Leveraging on its four years of operational success in Shanghai, PRC, the Group intends to continue expanding the Jumbo Seafood brand to other major Chinese cities, as well as introduce its other brands to the PRC.

Outside of Singapore and the PRC, the Group will be exploring franchising opportunities to diversify and grow its business offerings. In this respect, the Group had recently announced its entry into Taiwan with a local joint venture partner for its Jumbo Seafood brand.