Despite the encouraging beginnings in FY2020, fuelled by strong expansion momentum with four new outlets opening in South Korea, China and Taiwan, the Covid-19 pandemic led to a slowdown in Jumbo’s growth plans.
Jumbo Group has reported a loss of $8.2 million for the FY2020 ended September, compared to the $11.7 million in earnings a year ago.
This translates to a loss per share of 1.3 cents for the FY2020 compared to earnings per share (EPS) of 1.8 cents in FY2019.
The losses were mainly attributed to the social distancing measures and restrictions arising from Covid-19 pandemic, leading to a much lower footfall for the group’s restaurants.
FY2020 revenue dropped 36.5% to $97.6 million from $153.6 million previously.
Revenue from the group’s China operations fell by 22.2% y-o-y to $21.2 million while revenue from its operations in Singapore plunged 44.9% y-o-y to $69.7 million.
The lower revenues were largely attributable to the various measures imposed by the Chinese government in January 2020. The measures resulted in lower footfall in malls and, by extension, a decline in sales at its outlets.
Over the Chinese New Year season, Jumbo reported that it saw “significantly lower” revenues from the country owing to the measures.
Jumbo’s Singapore operations were also similarly affected due to the circuit breaker measures from April to June 2020, which prohibited customers from dining in.
Its outlets in the tourist areas namely Marina Bay Sands and Resorts World Sentosa remained closed till July 2020 due to the closed borders.
Two of its highest revenue-generating Jumbo Seafood outlets at Riverside Point and The Riverwalk also observed “visibly lower” footfall.
The lower overall revenue was slightly mitigated by the revenue from its Taiwan operations of $6.7 million due to the acquisition of a majority stake in Taiwan Jumbo Seafood in October 2019.
Gross profit fell 38% y-o-y to $60.7 million while gross profit margin stood lower at 62.2% compared to 63.8% in FY2019. The lower margins were due to the promotion campaigns and greater discounts extended to attract customers during the pandemic.
Other income increased to $10.6 million in FY2020 compared to $2.4 million in FY2019 primarily due to the jobs support scheme (JSS) granted by the Singapore government.
The group also received property tax and rental rebates amounting to some $2.5 million. It also recognised lower impairment on investments at fair value during the year.
With the reduced footfall at certain outlets due to the Covid-19 pandemic, Jumbo recognised an impairment loss of $1.4 million on property, plant and equipment for its non-performing outlets – namely Ng Ah Sio Bak Kut Teh at Resorts World Sentosa as well as for its Jumbo Seafood outlets in Xi’an and Taichung.
FY2020 share of loss in associates stood at $0.3 million mainly due to the underperformance of Jumbo Seafood outlets in Korea.
As at end September, cash and cash equivalents stood at $27.7 million, a reduction from the $46.6 million in the same period last year.
No dividend has been declared for the current financial period.
“Covid-19 has resulted in an extraordinary and extremely difficult period for the retail and hospitality sector, particularly the F&B industry,” says Jumbo’s group CEO and executive director Ang Kiam Meng.
“We have never been further away from ‘Business-As-Usual’ in FY2020, going through unprecedent situations such as temporarily closing majority of our outlets, replacing all dine-in with takeaways and deliveries which barely covered our variable operating costs and reinventing our menu to offer new products, such as value-for-money, high quality bento sets, to stay competitive in the market where everyone competes aggressively for the same small wallet share of consumers,” he adds.
“Whilst the sector outlook is uncertain and we are cognizant of existing and potential re-emergence of restrictions across the key countries we operate in, we believe our past performance and actions have placed us in a good position to capitalise on the significant opportunities that lie ahead while creating meaningful, long-term value for our shareholders.”
As at 9.39am, shares in Jumbo are trading flat at 32 cents.
