SINGAPORE (Feb 12): Neo Group Limited has reported that earnings for its 3QFY2020 ended Dec 31 2019 doubled to $3.5 million. Revenue, in the same period, increased by 2.7% y-o-y to $50.8 million, as the company generated growth in its core catering business.
Besides catering for company functions, Neo Group has generated “sturdy demand” providing food on a recurring basis to childcare and eldercare markets. The “tingkat” (home deliver) segment contributed to the growth too.
That aside, the company has spent the past few years acquiring or developing complementary earnings stream, such as the manufacturing of foodstuff.
“For resilient growth, we will continue to build up our diversified revenue streams across four key business segments,” says chairman and CEO Neo Kah Kiat.
“Food manufacturing, our second largest revenue driver, has continued to make good headway in the strengthening of its brand name through the introduction of new products and the opening of new markets overseas,” he adds.
However, the company didn’t do too well with its food retail segment. During the quarter, it closed non-performing outlets. That led to a 9.2% y-o-y drop in revenue to $11.4 million for the nine months ended Dec 31 2019.
Going forward, Neo Group expects “headwinds” to ensue because of the Covid-19 outbreak.
It will step up with precautionary measures, while continuing to eke out better efficiencies and synergy among its various business segments.
Barring unforeseen circumstances, Neo Group expects to remain in the black for the full year ending March 31 2020.
Neo Group closed Feb 12 at 45 cents, valuing the company at 8.32 times historical earnings.
