Jumbo Group issues profit warning

Nisha Ramchandani

Published Mon, May 4, 2020 · 11:59 AM

JUMBO Group is expected to report a significantly lower profit after tax year-on-year for H1 FY2020, owing to the impact of Covid-19 across its markets, it warned.

In a filing to the Singapore Exchange, it said: "The pandemic had significantly impacted our China's operations since January, before the Chinese New Year. In order to stop the spread of the Covid-19 virus, the Chinese government began imposing various measures to restrict the movement of people in January 2020. As a result, footfall in malls, and correspondingly, our outlets in China located in those malls, fell significantly."

Meanwhile, the topline for its Singapore operations took a hit after Singapore started reporting new cases and as the nation closed its borders to China and other markets starting from end-January. Social-distancing measures have also reduced the number of local dine-in customers.

It added: "The decline in revenue, coupled with the minimal reduction in rental expenses and less-than-proportionate decrease in staff costs - our two largest components of expenses - led to a much depressed bottom line for the second quarter of FY2020, and consequently a significantly lower profit for H1 FY2020."

It stressed that while its working capital position remains healthy with minimal bank borrowings, the group's key priority is to preserve cash to support working-capital requirements until the Covid-19 situation improves.

Further details will be provided when the group releases its unaudited financial results for H1 FY2020 on or before May 15.