Restaurant openings sap Jumbo Group profit
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Jumbo Group profit fell 24.8 percent in the third quarter to S$1.7 million (US$1.2 million) as new restaurant openings added to expenses.
The Singapore-listed restaurant group opened three new outlets in Singapore: a Jumbo Seafood at Jewel Changi, along with Zui Yu Xuan Teochew Cuisine and Chao Ting Teochew Pao Fan eateries at Far East Square.
Sales were affected by the closure of the Jumbo Seafood restaurant on Riverwalk for one month during renovations.
Group sales rose by 0.8 percent to $36.4 million.
For the first nine months of the financial year, Jumbo Group profit was up 6.2 percent to $9.1 million on revenue down 0.4 per cent to $113.1 million.
The company said in its results announcement that operating costs and tough competition across its Southeast Asian markets will continue to pose a challenge. However, the company expects new restaurants will help strengthen its market position in Singapore, “the bedrock of earnings growth”.
Questions & Answers
Q.What caused the drop in Jumbo Group's profit during the third quarter?
What caused the drop in Jumbo Group's profit during the third quarter?
Jumbo Group's profit fell due to increased expenses from opening three new restaurant outlets in Singapore. Sales were also affected by the one-month closure of a Jumbo Seafood restaurant for renovations during the same period.
Q.Which new restaurants did Jumbo Group open in Singapore?
Which new restaurants did Jumbo Group open in Singapore?
The group opened a Jumbo Seafood restaurant at Jewel Changi, plus Zui Yu Xuan Teochew Cuisine and Chao Ting Teochew Pao Fan eateries at Far East Square. These additions expanded their local footprint.
Q.How did the group's sales perform in the third quarter compared to profit?
How did the group's sales perform in the third quarter compared to profit?
While profit decreased by 24.8 percent, group sales actually rose by 0.8 percent to $36.4 million. The profit decline was primarily driven by increased operating costs associated with expansion.
Q.What challenges does Jumbo Group anticipate for the future?
What challenges does Jumbo Group anticipate for the future?
The company expects operating costs and intense competition across its Southeast Asian markets to continue posing a challenge. Despite this, new restaurants are anticipated to strengthen its market position in Singapore, which is key for earnings.
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