SINGAPORE (May 4): Restaurant chain operator Jumbo Group is expecting to report a “significantly lower profit after tax” for 1HFY2020.
In a profit warning issued on Monday after market hours, the group says it has suffered a “significant decline” in its Singapore revenue from January to March, due to the lack of tourists from China, and social distancing measures in end-January, and February to March, respectively.
A significant proportion of diners at Jumbo’s Riverside Point outlet are tourists. Besides this outlet, two other outlets in Singapore are listed as temporarily closed, due to the circuit breaker measures which disallows dining in.
Jumbo’s restaurants in China had also been affected since the beginning of restriction measures in the country. It runs six outlets in China.
Despite the decline in revenue, there was “minimal reduction” in the group’s operating expenses such as rent and staff costs.
As a result, the group expects a much lower income for 2QFY2020, and a much lower profit for 1HFY2020.
The group seems to have been prepared for the situation though, with a “healthy” working capital position, or positive assets, with minimal bank loans.
However, how the group performs in future, will depend on the impact of the pandemic. Its key priority now, is to preserve cash for its debt obligations and business-related expenses until the situation improves.
Jumbo is expected to release its financial results for 1HFY2020 on May 15, 2020.
Jumbo shares closed at 1 cent down, or 3.9% lower, at 24.5 cents.
