Japanese multi-brand food and beverage operator RE&S Holdings has reported earnings of $7.65 million in its FY2023 ended June 30, 19.1% lower compared to FY2022.
The full-year y-o-y drop comes as RE&S reported earnings of just $2.09 million for its 2HFY2023 period, a 65.3% slump compared to the $6.02 million reported in the previous corresponding period.
The company reported earnings of $5.55 million in its 1HFY2023 ended December last year, which conversely came in 61.7% higher compared to its 1HFY2022.
RE&S' earnings decrease came about due to the absence of government and landlord support that was available in FY2022 in relation to the pandemic, which saw the company's other operating income for FY2023 drop by 48.2% to $3.7 million in FY2023.
As a result, earnings per share also dropped from 2.7 cents in FY2022 to 2.2 cents in FY2023.
However, revenue for the full-year period still grew by 12.4% y-o-y to $174.06 million, up from $154.84 million in FY2022, primarily due to growth in the full-service restaurants (FSR) and quick service restaurants segments, as well as in the convenience and others (QSR) business.
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This growth was fuelled by the opening of seven new outlets and revamp of Jurong Point’s &Joy Japanese Food Street in August 2022. Meanwhile, FSR revenues increased by 10.8% from $81.2 million in FY2022 to $90.0 million in FY2023.
The cost of raw materials and consumables used also increased by 9.4% to $47.04 million.
Operating expenses increased by 13.5% to $114.9 million in FY2023, mainly due to the opening of new outlets.
Taking into account the interim dividend of 0.9 cents per share announced for 1HFY2023, RE&S has declared a cash dividend of 1.8 cents per share for the full-year period. The 2HFY2023 dividend of 0.9 cents is a slight increment on the 0.85-cent dividend declared for the corresponding period last year.
Says executive director and CEO Fenton Foo: “The F&B business landscape has been challenging and is expected to remain tough due to escalating costs driven by inflationary pressure. Manpower shortages and difficulty in hiring workers have further intensified the challenges.”
However, he says that RE&S’s dedication to enhancing both its revenue and profitability remains unchanged, noting that the company continued to open more QSR outlets like Gokoku, Yakiniku-GO and Mister Donut during FY2023 to offer “compelling value proposition” to customers while enabling the company to reduce reliance on manpower. “Moving ahead, the Group will remain focused on growing our brand presence in the QSR segment,” adds Foo.
Shares in RE&S closed flat on Aug 23 at 29.5 cents.
