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Store closure impairment charges drag Japan Foods Q4 net profit down 68%

CATALIST-LISTED Japan Foods Holdings reported a net profit of S$465,000 for its fourth quarter ended March 31, 2016, down 68 per cent from S$1.46 million a year ago.

Revenue and gross profit actually went up around 6 per cent each, but an impairment charge of S$810,000 of plant and equipment due to store closures dragged the firm's results down.

Revenue was up 5.8 per cent to S$15.7 million, while gross profit was up 6.4 per cent to S$13.3 million.

The firm is known for operating the Ajisen Ramen franchise as well as other brands like Kazokutei, Menya Musashi, and Osaka Ohsho. It has 47 Singapore restaurants at end-March, compared to 45 a year ago.

For its full year ended March 31, net profit was down 20 per cent to S$3.8 million while revenue was flat at S$63 million.

A dividend of 1.25 Singapore cents a share was declared, bringing dividend for the year to two cents. The full-year dividend was unchanged from a year ago.

"Despite more intense competition and a slowing economy, Japan Foods was able to maintain its sales at the same level because of its proven strategy of seasonal promotions, regular menu rejuvenation and restaurant portfolio management," the company said in a press release.

Japan Foods last traded at S$0.395.