Seafood restaurant operator Jumbo Group primed for Catalist listing

Jumbo Group is looking to raise about $40 million in its initial public offering (IPO), which it launched on Wednesday, Oct 28, 2015.
Jumbo Group is looking to raise about $40 million in its initial public offering (IPO), which it launched on Wednesday, Oct 28, 2015. ST PHOTO: LIM SIN THAI

SINGAPORE - Seafood restaurant chain Jumbo Group is looking to raise about $40 million in a public listing on the stock exchange here.

It launched its initial public offering (IPO) on Wednesday (Oct 28) and seek a listing on the Catalist here.

The company is floating 88,233,000 new shares at 25 cents apiece - including two million shares for public offer and 86,233,000 placement shares - for application, in order to raise capital for expansion in Shanghai and Singapore.

Another 72,100,000 cornerstone shares have also been subscribed by OSIM chief executive Ron Sim and Orchid 1 Investments, a unit controlled by Temasek Holdings' subsidiary Heliconia Capital.

"Jumbo intends to launch at least four additional food and beverage outlets in both countries within the next 24 months," chief executive Ang Kiam Meng said, adding that the focus will be chiefly on Shanghai, where spending per head has been higher, at around $70 compared with Singapore's $60.

The group currently operates 14 outlets in Singapore and two in Shanghai across five brands. China's operations contributed to 7.4 per cent of the group's total revenue in the first half this year, up from 4.2 per cent in the same period last year. The third outlet in Shanghai is set to open in January next year.

Mr Ang said: "China represents a growth driver for us and this has translated into the geographical segment's revenue in first half 2015 rising 93.8 per cent to $4.6 million from $2.4 million in the first half of 2014."

Jumbo's total revenue has been growing at a clip. Over the past two years revenues have been rising at an annual rate of 34.2 per cent, rising to $13.8 million last year.

The proceeds from the listing will also help Jumbo invest in its central kitchen to further boost operating efficiency.

The central kitchen in Singapore is instrumental in the sauce preparation for Jumbo's famous crab dishes, and the savings on manpower and resources have been part of the reason why Jumbo's profit margin grew from 8.7 per cent in 2012 to 12.3 per cent last year, Mr Ang noted.

The share application period will close at 12pm on November 5, with the listing and trading of Jumbo's shares expected to commence at 9am on Nov 9.

The board of directors intends to recommend dividends of no less than 30 per cent of the group's net profit to shareholders for its financial year ended Sept 30 in 2016 and 2017.

whwong@sph.com.sg