Neo Group posts 14-month earnings of S$7.4m

Singapore

FOOD and beverage caterer Neo Group's net profit for the 14 months ended March 31, 2015, climbed 15.7 per cent to S$7.4 million. This came on the back of revenue rising 47.8 per cent to S$77.4 million, largely due to growth in the group's food-catering business.

Neo changed its financial year end from Jan 31 to March 31. The preceding comparative period is for the finanal year ended Jan 31, 2014.

Earnings per share stood at 5.14 cents, while net asset value was 16.79 cents per ordinary share. The group has proposed a one-tier tax-exempt final cash dividend of 1.05 cents per share, bringing the total dividend declared for the 14fourteen months to 2.56 cents per share.

Earlier this month, the group announced that it will be acquiring a 55 per cent stake in Thong Siek Holdings (TSH) - the parent company of DoDo Fishballs - for S$7.35 million. The acquisition - Neo Group's first major one since its listing in 2012 - is expected to be completed by mid-June.

The acquisition will allow the group to create new business-to-consumer (B2C) income streams and expand its customer base and market segments, said Neo Group chairman and chief executive officer Neo Kah Kiat. It will also give the group access to TSH's large global distribution network, which comprises 22 countries.

In addition, Neo Group has opened a centralised kitchen at Enterprise Road, which became fully operational in November last year. The site, with a built-in floor area of 57,111 square feet, houses kitchens which produce food for Neo Garden, Best Catering and Deli Hub, three of the group's four catering brands.

It is also home to the group's procurement arm NKK, Japanese food ingredients subsidiary H-Cube, Niwa Sushi - the parent of its umisushi brand - and I DO Flowers and Gifts, the group's flowers and gifts business.

The new facility is expected to increase the group's capacity and cut costs through consolidated production processes. Revenue from the group's food-catering business grew 47.1 per cent to S$57.36 million, due in part to a higher demand for its delivery services. Meanwhile, revenue from its food retail business climbed 51.6 per cent to S$19.15 million.

The group aims to increase the market share of its food-catering business through heightened marketing efforts.Neo shares closed at 91 cents on Thursday, down two cents.