RE&S posts 32.9% fall in Q4 net profit on outlet closures

CATALIST-LISTED Japanese food and beverage group RE&S Holdings saw net profit fall 32.9 per cent to S$628,000 for the fourth quarter ended June 30, down from S$936,000 in the year-ago period, it said in a regulatory filing on Monday after market close.

Revenue for the quarter was S$33.6 million, down 4.9 per cent from S$35.3 million in the year-ago period.

Revenue from full-service restaurants declined 8.4 per cent or S$2.1 million, mainly because of the closure of outlets in Great World City due to mall enhancement works, and the closure of Tiong Bahru Plaza's Ichiban Boshi outlet. This was partially offset by a 4.3 per cent rise in revenue from RE&S's other business segment: quick-service restaurants, convenience, and others.

Earnings per share for the quarter were 0.18 Singapore cent, compared with 0.26 Singapore cent for the year-ago period. A final dividend of 0.45 Singapore cent was declared, compared with 0.40 cent for the year-ago period.

With the latest quarter's results, full-year net profit was S$4.04 million, up 13.3 per cent from S$3.57 million the previous year.

Noting the closure of multiple outlets at Great World City, RE&S executive director and chief executive officer Fenton Foo said: "We plan to conduct strategic business consolidation through reviewing our existing portfolio.

"We are looking at refreshing certain QSR (quick-service restaurant) concepts in existing outlets and increasing new outlets to grow the top-line, and at the same time, improve the bottom-line by further streamlining our operations and exercising careful cost-cutting measures."

While noting that the F&B industry is expected to face continuous challenges, RE&S said it was confident to overcome these "through expansion via strategic partnerships" and tackling labour shortages via digital solutions.

On costs, RE&S will continue to improve workflow processes and labour productivity, it said. "Together with the optimisation of its central kitchen function, the group seeks to further explore operational efficiencies."

RE&S shares closed down 0.1 Singapore cent or 0.58 per cent at 17.2 Singapore cents on Monday before the results release.