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Unaudited Financial Statements And Dividend Announcement For The Third Quarter Ended 30 June 2017
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REVIEW OF THE GROUP'S PERFORMANCE
Revenue increased by 6.4% or $2.1 million, from $32.7 million in the third quarter ended 30 June 2016 ("Q3 FY2016") to $34.8 million in the third quarter ended 30 June 2017 ("Q3 FY2017") mainly due to an increase in revenue from the Singapore and the People's Republic of China ("PRC") operations.
Cost of sales
In line with the increase in revenue, cost of sales which comprised raw materials and consumables used increased by 6.9% or $0.9 million, from $12.1 million in Q3 FY2016 to $13.0 million in Q3 FY2017.
Gross profit increased by 6.2% or $1.2 million, from $20.6 million in Q3 FY2016 to $21.8 million in Q3 FY2017 due to the increase in revenue. Gross profit margin remained fairly stable at 62.9% in Q3 FY2016 and 62.7% in Q3 FY2017.
Other income decreased by 21.3% or $0.2 million, from $0.9 million in Q3 FY2016 to $0.7 million in Q3 FY2017, largely due to lower government grants received and lower interest income.
Employee benefits expense
Employee benefits expense increased by 5.5% or $0.5 million, from $9.8 million in Q3 FY2016 to $10.3 million in Q3 FY2017. This was mainly due to an increase in headcount and remuneration within the Group.
Operating lease expenses
Operating lease expenses increased by 24.5% or $0.7 million, from $2.8 million in Q3 FY2016 to $3.5 million in Q3 FY2017 mainly due to the leases for our new outlets, outlet expansion and new corporate offices in Singapore and Shanghai, PRC.
Depreciation expense increased by 29.8% or $0.3 million, from $0.9 million in Q3 FY2016 to $1.2 million in Q3 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 decreased by 11.3% or $0.3 million, from $3.0 million in Q3 FY2016 to $2.7 million in Q3 FY2017.
Income tax expense
Income tax expense decreased by 25.6% or $0.1 million, from $0.7 million in Q3 FY2016 to $0.6 million in Q3 FY2017, in line with the decrease in profit before tax.
Profit after tax
In view of the above, profit after tax increased by 1.5% or $0.05 million, from S$3.48 million in Q3 FY2016 to $3.53 million in Q3 FY2017.
Profit attributable to owners of the Company
Profit attributable to owners of the Company decreased by 1.1% or $0.03 million, from S$3.40 million to $3.37 million in Q3 FY2017.
Review of the group's Financial Position
The Group's current assets decreased by $8.7 million from $66.7 million as at 30 September 2016 to $58.0 million as at 30 June 2017 mainly due to a decrease in cash and cash equivalents of S$11.1 million as a result of payment of dividends and partially offset by an increase in trade and other receivables of S$2.4 million.
The Group's non-current assets increased by $0.4 million from $19.5 million as at 30 September 2016 to $19.9 million as at 30 June 2017 mainly 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.
The Group's current liabilities decreased by $5.9 million from $18.9 million as at 30 September 2016 to $13.0 million as at 30 June 2017 mainly due to the decrease in trade and other payables of S$5.0 million and a decrease in income tax payable of S$0.7 million.
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 June 2017 due to full repayment of bank borrowings.
REVIEW OF THE GROUP'S CASH FLOW STATEMENT
The Group generated net cash of $5.0 million from operating activities before changes in working capital. Net cash used in working capital amounted to $1.2 million mainly due to an increase in trade and other receivables of $1.5 million and partially offset by an increase in trade and other payables of $0.4 million. The Group paid income tax of $0.9 million. As a result, net cash from operating activities for Q3 FY2017 was $2.9 million.
Net cash used in investing activities for Q3 FY2017 amounted to $0.6 million mainly for the purchase of kitchen equipment.
Net cash used in financing activities for Q3 FY2017 amounted to $3.2 million mainly due to dividend paid to owners of the Company.
As a result, cash and cash equivalents decreased by $0.8 million in Q3 FY2017.
Commentary on current year prospects
The food and beverage ("F&B") industry is expected to continue to be challenging, given the weak economic outlook coupled with pressure on operating costs and keen competition. Nonetheless, the Group will continue to leverage on its brands and talents to stay competitive, strengthen and broaden its portfolio of brands for sales and profitability. The Group will also 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.
The Group plans to expand its brands to other major cities in Asia and pursue franchising opportunities to diversify and grow its business offerings. Plans are underway to establish more franchised restaurants in the next 6 months.
The Group will also continue to explore suitable opportunities to expand its network of F&B outlets and business through the opening of new outlets, acquisitions, joint ventures and strategic alliances with partners, who can strengthen its market position and add value to its existing business. The Group's first JUMBO Seafood restaurant in Beijing, PRC began operations on 12 July 2017.
Barring any unforeseen circumstances, the Group expects to continue to grow its business and remain profitable for FY2017.