SINGAPORE (May 29): Old Chang Kee, the retailer of curry puffs and snacks, reported FY17 earnings fell by more than half to $1.7 million from $5 million on higher expenses.
Selling and distribution expenses, administrative expenses and other expenses widened 14.5% to $48.6 million.
The increase in other expenses of $3.3 million was mainly due to the revaluation deficit for the group’s Singapore and Malaysia factory building by $3.0 million.
Full-year revenue rose 6.1% to $78.3 million as sales from retail outlets increased by $4.3 million or 5.9%.
The increase in revenue was mainly due to sales contribution from new outlets, partially offset by lower sales from existing outlets, and absence of sales from temporary closure of outlets due to mall revamps.
The group’s signature puff products remained the major contributor to its revenue and accounted for 31.8% of the group’s revenue in FY17, as compared to 31.6% in FY16.
Sales from other services, such as delivery and catering services increased by $170,000 or 15.9%, mainly due to higher sales generated from food delivery services.
Cost of sales increased 5.5% to $28.7 million.
Other income decreased by $527,000.
The group's gross profit margin increased from 63.1% in FY16 to 63.3% in FY17, mainly due to improved factory efficiency.
In its outlook, Old Chang Kee expects rental, labour and raw material costs to remain high over the next 12 months, and that the labour market will continue to remain tight.
The group will be integrating its factory in Iskandar Malaysia and its expanded factory facilities in Singapore at 2 and 4 Woodlands Terrace in the coming months. These will provide the group with a platform to expand its product range and grow its business both locally and regionally.
As at March 31 2017, the group operated a total of 89 outlets in Singapore as compared to 83 outlets as at March 31 2016.
Shares of Old Chang Kee closed 1 cent higher at 84 cents.
