Old Chang Kee second-half profit up 50% to $5.3 million

SINGAPORE – Curry puff specialist Old Chang Kee on May 30 posted a 50 per cent rise in net profit to $5.3 million for its second half ended March, from $3.5 million in the same period a year ago.

Revenue for the half year rose 10 per cent to $50.7 million, from $46.1 million the year before, driven by higher retail, delivery, catering and non-retail sales.

Revenue from Old Chang Kee’s retail outlets increased by $3.5 million, or 8.3 per cent, due mainly to incremental revenue from new outlets and an increase in revenue from existing outlets. This was partially offset by a decrease in revenue from outlets that have closed. As at March 31, the group operated a total of 79 outlets in Singapore.

Meanwhile, its revenue from other services, such as delivery, catering and non-retail sales, climbed by $1.1 million, or 24.4 per cent. This was primarily due to higher delivery revenue, corporate catering orders and non-retail sales arising from a continued pickup in events organised during the period under review.

Selling and distribution expenses rose 12.8 per cent to $20.3 million, from $18 million the year before. This was attributed to higher staff, advertising and promotion costs, depreciation of right-of-use assets, and turnover rental expenses.

Earnings per share stood at 4.36 cents for the period, up from 2.91 cents year ago.

For the full year, net profit rose 57.2 per cent to $9.7 million. Revenue was also up, climbing 12.4 per cent to $101 million. Earnings per share stood at 7.97 cents for the full year, up from 5.07 cents the year before.

A final dividend of one cent per share was declared, unchanged from the year-ago period.

Old Chang Kee noted that inflationary pressures have remained persistent, particularly for raw material and labour costs. Rental costs also remained elevated.

It added that the current manpower shortage in the retail sector remains “challenging”, while retail demand “looks subdued” in the near term.

“The group will continue with its current strategies to navigate this difficult period of sustained inflation,” it said. These include efforts to reduce operating costs, improve gross margins, rationalise the group’s operations to overcome manpower shortages, and look for more non-retail revenue streams, such as business-to-business sales.

In addition, the group will continue to look for opportunities to increase the number of outlets at strategic locations, such as high-traffic transport hubs. It will also explore possibilities for “synergistic business combinations”, as well as expanding its logistics and manufacturing facilities.

Shares of Old Chang Kee closed flat at 72.5 cents on May 30 before the results were announced.

THE BUSINESS TIMES