SINGAPORE (Aug 8): Neo Group reported 1Q18 loss narrowed 74% to $0.7 million from a loss of $2.5 million in 1Q17 as revenue grew 27.3% to $40.6 million.
The group’s flagship Food Catering segment recorded a 5.1% increase in revenue to S$12.4 million in 1Q18 compared to $11.8 million a year ago, boosted by traction gained from Gourmetz – a new 51%-owned catering brand established in November 2016 – which targets the eldercare and childcare niche segments, earnings from which are recurrent in nature.
Due to a deliberate decision from an ongoing strategic business review to consolidate non-performing leases upon expiry, the Food Retail segment reported 14.0% lower revenue this quarter to $4.2 million from $4.8 million in 1Q17.
The Food Manufacturing business posted 5.1% stronger revenue of $11.4 million from $10.9 million a year ago, boosted by the successful launch of new product offerings during the period.
Maiden contribution from new subsidiary, Hi-Q Plastic Industries Sdn Bhd, that was acquired in April 2017, as well as revenue contributed by U-Market Place Enterprise led to a 195.0% surge in 1Q18 revenue for the Supplies and Trading segment to $12.4 million compared to $4.2 million in 1Q17.
Says Chairman and CEO Neo Kah Kiat: “Over the last two years, we made the tough but necessary decision to review our business and transform ourselves into a vertically-integrated food and catering group to ensure our sustainable long-term growth. With the Food Manufacturing segment back in the black, and the Food Retail segment well on track in its turnaround, we are focused on driving the group’s profitability this financial year. Additionally, we are focused on cross-selling opportunities and growing our recurring income streams for greater earnings resilience.”
Shares in Neo Group closed 0.5 cent higher at 67.5 cents on Monday.
