Higher expenses ate into the earnings of food caterer Neo Group in the last financial year.
Net profit fell 18.1 per cent to $6.1 million for the 12 months to March 31, the firm reported yesterday.
The firm changed its financial year end from Jan 31 to March 31, so the percentage decline is from the figure for the 14 months from February 2014 to March last year.
On an annualised basis, net profit rose 13.9 per cent.
Revenue increased 62 per cent to $125.4 million, from $77.4 million in the preceding 14 months.
AT A GLANCE
$125.4 million (+62.0%)
$6.1 million (-18.1%)
EARNINGS PER SHARE
4.18 cents (-18.7%)
The rise was mainly due to contributions from new subsidiaries - $37.3 million of 10-month turnover from Thong Siek Holdings (TSH), which owns the DoDo brand of fishballs, and $7.5 million of five-month sales from CT Vegetables and Fruits.
But soaring advertising and acquisition-related expenses offset the rise in revenue. Advertising costs rose 79.7 per cent from the preceding 14 months to $5.4 million.
Turnover from Neo's food catering segment, which contributes half of its total sales, rose 9.4 per cent to $62.7 million, compared with the 14-month period.
But revenue from its food retail business fell from $19.2 million in the 14-month period to $17.5 million. On an annualised basis, it rose 3.9 per cent, said the firm. It owns 30 retail outlets contributing 13.9 per cent of its total revenue.
Earnings per share in the past financial year fell 18.7 per cent to 4.18 cents. Net asset value per share rose 24.9 per cent to 20.97 cents as of March 31.
Mr Jeffrey Liew, Neo's executive director for food retail, said the segment was hit by reports of the Group B Streptococcus bacterial infection linked to raw fish, as well as the prolonged period of haze. He said Neo will be more careful in renewing leases for its outlets, especially those that have not performed as well in less favourable locations.
The firm is looking to grow its export business through TSH's network spanning over 20 countries.
Neo shares closed up two cents at 65 cents yesterday after results were announced.