Japanese multi-brand food and beverage operator RE&S Holdings has reported earnings of $2.4 million for its 1HFY2024 ended Dec 31, 2023, 56% lower compared to the corresponding period last year.
Earnings per share correspondingly fell to 0.7 cents, compared to 1.6 cents in 1HFy2023
Revenue grew by 1.4% y-o-y for 1HFY2024 to $89.3 million from $88.0 million in 1HFY2023, primarily due to the increase in revenue contribution from quick-service restaurants (QSR), convenience and others.
Operating expenses saw a notable increase of 9.6% y-o-y, reaching $60.8 million in 1HFY2024. This increase was primarily driven by a 11.6% surge in employee benefit expenses, totaling $32.4 million in 1HFY2024, due to an improvement in the employee compensation package to ease recruitment and increased hiring of workers for new outlets.
Finance costs also increased by 17.1% y-o-y to $1.6 million for the period from an increase in new leases.
Other expenses increased by 18.1% y-o-y to $1.5 million in 1HFY2024, mainly due to an increase in professional fees incurred in opening new outlets, increase in plant and equipment written off due to the revamp of outlets, partially offset by an unrealised gain of financial assets held at fair value through profit or loss.
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RE&S has declared an interim dividend of 0.6 cents per share.
CEO Fenton Foo says: “Inflationary pressures and higher interest rates have presented significant headwinds to the F&B industry. Coupled with the labour shortage issue, the business environment in the F&B sector remains challenging. However, our QSR outlets have demonstrated encouraging performance, with rising demand for QSR concepts evident in the market.”
“In light of this trend, we are committed to expanding our brand presence within the QSR segment by establishing more outlets such as Gokoku Bakery, Yakiniku-GO, Mister Donut and Kuriya Japanese Market as well as improving our full-service restaurants (FSR) at the same time. Moving forward, the group remains dedicated to strengthening our competitive edge and delivering enhanced value to our customers through innovative product offerings tailored to evolving consumer preferences,” he adds.
Shares in RE&S closed unchanged at 26.5 cents on Feb 14.
