RE&S Holdings Limited reported $9.5 million in earnings for FY2022 ended June, unchanged from FY2021, bringing earnings per share to 2.7 cents.
Revenue for FY2022 was $154.8 million up 21.1% from $127.8 million in FY2021, largely due to higher revenue contribution as social distancing restrictions were removed, resulting in more seats available for dine-in customers.
The growth in Quick-Service Restaurants, Convenience & Others (QSR) segment continued to gain traction with a revenue registered of $73.6 million in FY2022, marking an increase of 44.2%. This was largely attributable to the opening of new Yakiniku-GO, Kuriya Japanese Market and Gokoku Japanese Bakery outlets in 1HFY2022. Additionally, there was also an increase in food delivery sales with customers becoming more accustomed to food delivery service and its convenience amid the pandemic.
The group has also made a reclassification adjustment relating to commission expenses paid to delivery platforms of $3.9 million from revenue to other operating expenses for the comparative figures as the group has determined that this is more comparable with market practice.
The cost of raw materials and consumables net of changes in inventories increased by 26.6% to $43.5 million. The cost of raw materials and consumables taking into consideration changes in inventories were 28.1% and 26.9% of total revenue for FY2022 and FY2021 respectively. This was mainly due to a general increase in the average prices of raw materials and consumables, arising from the disruption in global supply and higher inflation.
As at end June, cash and cash equivalents stood at $24.4 million.
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The group also proposes a final cash dividend of 0.85 cents per share, bringing the total dividend for FY2022 to 1.7 cents per share. This represents about 63.7% payout of profit after tax with a dividend yield of 9.0% based on the closing share price of 18.8 cents as at June 30.
The group had noted that the Covid-19 pandemic had caused several disruptions that affected its business operations, including its relationships with existing and future customers, suppliers and employees, which will continue to have an effect on its financial position, financial performance of operations, cash flows and future prospects.
Nonetheless, the reopening of Singapore’s economy and the relaxation of Covid-19 safety measures have helped the overall F&B industry, as customer traffic has improved. However, the operating environment of F&B industry is increasingly challenging. Besides facing challenges from supply chain disruptions, F&B players have to deal with surging raw material and operating costs due to rising inflation. Manpower shortages and high labour costs will continue to persist which are expected to plague the F&B sector.
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“With Singapore taking steps towards normalcy and the further easing of social restrictions, we are delighted to welcome back more customers,” says RE&S executive director and CEO Fenton Foo, adding that the group has re-invented its existing cluster of restaurant and retail outlets, which have been met with good responses from the public.
“We will continue to upgrade our outlets to further enhance customers’ dining experience and strive to serve them better. We remain mindful of the rising cost of labour, raw materials and operations, and will stay vigilant in a rapidly evolving landscape while continuing to look for new business opportunities,” he adds.
Shares in RE&S closed at 24 cents on Aug 29.
