Japan Food Holding trims offshore outlets

Singapore-based Japanese restaurant chain Japan Food Holding achieved 10.8 per cent growth in net profit for the six months to September 30.

This took its net profit to S$2.7 million (US$1.95 million) on the back of a 5.5 per cent increase in revenue to S$33.5 million.

At the end of the period it had 51 outlets, up six from the same time a year ago.

On a quarterly basis, the group maintained its net profit at about $1.4 million, while its revenue eased up by 4.7 per cent to $16.6 million.

Japan Foods says its improved performance was driven mainly by it having more restaurants, with encouraging performances from its new brands including Dutch Baby Cafe, Ginza Kushi-Katsu and New ManLee Bak Kut Teh. There was also a higher gross profit margin for the second quarter, up from 84.3 per cent last year to 85.1 per cent, thanks to constant cost-management efforts such as bulk purchasing and product pricing.

Outside Singapore, the group’s network dropped to 19 restaurants from 24 with the closure of three Ajisen Ramen restaurants in Malaysia and Vietnam. In Hong Kong, the group’s associated companies closed two Menya Musashi restaurants when their leases expired.

Takahashi says the coming 12 months are expected to remain challenging in Singapore because of intense competition, tight labour supply, rising business costs and the uncertain economic outlook.

Executive chairman/CEO Takahashi Kenichi says that consumer sentiment turning “bearish” because of recession fears has been tough on F&B businesses. “However, I believe we are offering good-quality food at reasonable price points, and this has enabled us to continue attracting diners.”

Despite the solid overall result, the group’s flagship brand and main revenue generator, Ajisen Ramen, as well as its Keika Ramen brand, had a fall in revenue from $6.9 million in last year’s second quarter to $6.5 million for the latest period. This was a result of two Singapore restaurants – at Compass Point and Tiong Bahru Plaza – having to close for mall renovation works.