Chinese families in Singapore are well-acquainted with the reunion dinner that marks the end of the Lunar Year. These lavish affairs, typically held in Chinese restaurants, symbolise abundance and celebration. At Tung Lok Group’s restaurants, Chinese dishes like Peking duck and chilli crab foster togetherness by promoting communal dining, as many of these dishes are meant to be shared with others on one big table.
In a previous interview, Andrew Tjioe, managing director and founder of Tung Lok, said: “Back in the 1980s, every weekend, our restaurant — Charming Garden — would be packed with regulars. Family lunches were a tradition; the same people would return every week. But today, people are spoilt for choice and you don’t see that sort of loyalty anymore.”
In response to the changing trends, Tjioe has expanded the group’s offerings and presence in Singapore. Although Charming Garden has since closed, Tung Lok now operates 16 F&B brands across its markets, each representing a unique food concept. While Singapore remains the group’s main market, it also has a presence in Japan, Vietnam, and the Philippines through its associates.
In Singapore, the group manages around 14 brands across more than 33 outlets, offering popular Chinese-style dining, pancakes and Japanese cuisine. Tjioe acknowledged that the pandemic significantly impacted the group, leading to financial losses and the closure of several outlets. However, the group’s prospects now appear to be improving.
The group has been profitable since FY2023. In the latest FY2024 ended March, it posted earnings of $2.05 million, down 51.3% from $4.2 million in FY2023. This decline is primarily due to inflationary pressures, which increased the costs of food ingredients, manpower, utilities and other operating expenses, thereby affecting profit margins.
Revenue for the period grew 4.4% y-o-y to $90 million. This increase was driven by higher revenue from the catering business following the post-pandemic resumption of meetings, incentives, conferences and exhibitions (Mice) events, contributions from a new outlet that opened in 1HFY2024, and improved performance from existing outlets. However, this growth was partially offset by a $4.5 million revenue loss from the closure of three outlets in FY2024.
See also: Japan Foods' chief chef to resign
Tung Lok declared a first and final cash dividend of 0.224 cents for FY2024, lower than the 0.77 cents it paid in FY2023. On its outlook, the group expects to continue facing significant headwinds. Industry-wide, inflationary pressures have increased operating costs related to labour, food ingredients and utilities. The group will continue consolidating its resources by channelling resources to more promising brands. Notably, it established its fifth Tung Lok Seafood outlet at Gardens by the Bay in FY2024.
The group is cognisant that to stay relevant and thrive in the current challenging operating environment of the F&B industry, it must continuously evaluate strategies, infuse innovation into its offerings and leverage technology to its advantage. “We will continue to refine our business strategies and proactively seek and adopt digital initiatives that optimise operational efficiencies to maintain a competitive edge,” says the group in its FY2024 annual report.
Tung Lok anticipates that profit margins will remain under pressure due to rising operational costs, intense competition in the F&B industry, and volatile economic conditions. In response, the group will drive revenue growth, tightly manage operating costs and continuously improve operational efficiencies.
The company adds: “While the path ahead may be challenging, the group is confident in the strength of our business fundamentals and will be able to effectively navigate the obstacles ahead. We shall continue to remain prudent in managing our capital while also looking out for new opportunities.”
