Singapore-based Japanese restaurant chain Japan Food Holding achieved 10.8 per cent growth in net profit for the six months to September 30.
This took its net profit to S$2.7 million (US$1.95 million) on the back of a 5.5 per cent increase in revenue to S$33.5 million.
At the end of the period it had 51 outlets, up six from the same time a year ago.
On a quarterly basis, the group maintained its net profit at about $1.4 million, while its revenue eased up by 4.7 per cent to $16.6 million.
Japan Foods says its improved performance was driven mainly by it having more restaurants, with encouraging performances from its new brands including Dutch Baby Cafe, Ginza Kushi-Katsu and New ManLee Bak Kut Teh. There was also a higher gross profit margin for the second quarter, up from 84.3 per cent last year to 85.1 per cent, thanks to constant cost-management efforts such as bulk purchasing and product pricing.
Executive chairman/CEO Takahashi Kenichi says that consumer sentiment turning “bearish” because of recession fears has been tough on F&B businesses. “However, I believe we are offering good-quality food at reasonable price points, and this has enabled us to continue attracting diners.”
Despite the solid overall result, the group’s flagship brand and main revenue generator, Ajisen Ramen, as well as its Keika Ramen brand, had a fall in revenue from $6.9 million in last year’s second quarter to $6.5 million for the latest period. This was a result of two Singapore restaurants – at Compass Point and Tiong Bahru Plaza – having to close for mall renovation works.
Fall offset
Revenue had also been affected by lower net sales at other restaurants as well as the conversion of an Ajisen Ramen brand restaurant at Clementi Mall to the New ManLee Bak Kut Teh brand. The fall in sales was partially offset by revenue contribution from an Ajisen Ramen brand restaurant at Bukit Panjang Plaza following its change from the Osaka Ohsho banner.
Contributing to revenue were two new Keika Ramen restaurants, at White Sands and Tiong Bahru Plaza, and the opening of an Ajisen Ramen restaurant at Compass One.
Other brands in the group generated an increase in revenue of $1.2 million in the second quarter, driven by the Dutch Baby Cafe, Ginza Kushi-Katsu and New ManLee Bak Kut Teh brands, which had a combined year-on-year increase in sales of $1.5 million. This was partially offset by a $300,000 decrease in revenue contribution from restaurants under the Botejyu, Fruit Paradise, Hanamidori, Kazokutei and Menzo Butao brands over the same period.
Overseas, the group’s network dropped to 19 restaurants from 24 with the closure of three Ajisen Ramen restaurants in Malaysia and Vietnam. In Hong Kong, the group’s associated companies closed two Menya Musashi restaurants when their leases expired.
Takahashi says the coming 12 months are expected to remain challenging in Singapore because of intense competition, tight labour supply, rising business costs and the uncertain economic outlook.
However, subject to the availability of suitable locations, the group hopes to open more New Manlee Bak Kut Teh restaurants, and also seek to expand in the Asean region by way of joint ventures, acquisitions and/or sub-franchising.
