No Signboard Holdings reported Tuesday its fiscal third quarter swung to a net loss of S$1.44 million from a year-ago net profit of S$761,142 on weak revenue from the seafood restaurants and a drop in beer sales.
The company said it also faced the temporary closure of one of its seafood outlets to carry out major repair works.
Revenue for the quarter ended 30 June fell 15.1 percent on-year to S$5.92 million, the iconic Singapore chilli crab restaurateur said in a filing to SGX.
“With the slow down in the Singapore economy, resulting in decreasing average spend per customer and along with the increase in competition, there has been an impact on the group’s seafood restaurant and beer businesses,” No Signboard said.
The chilli crab maker said it plans to seek growth outside Singapore and plans to open its first seafood restaurant in Shanghai by end-December. It also plans to open a second Little Sheep outlet in Singapore in November, and its first Mom’s Touch outlet in the city-state in September, the filing added.
No Signboard said it is “re-conceptualizing” the Hawker QSR brand and it will close those outlets as part of a cost rationalization move.
Employee benefits expense climbed 42.7 percent on-year in the quarter to S$2.62 million amid expansion in the restaurant segment, No Signboard said.
Depreciation and amortization expense surged more than four times on-year to to S$406,684 on additional capital expenditure to set up new outlets and on additional franchise fees for the hotpot and quick-serve segments, the filing said.
The seafood restaurants accounted for 67 percent of third quarter revenue, while the hotpot and quick-serve outlets, which started operations in the fiscal first quarter, contributed around S$1 million in revenue, No Signboard said.
Seafood restaurant revenue was weak in the quarter as average spending per customer dropped around 10 percent on-year, No Signboard said. The beer segment’s revenue also dropped “significantly” during the three-month period amid increased competition, the filing said, adding that non-performing beer contracts were terminated in the fiscal first quarter.
For the nine-month period, No Signboard reported it swung to a net loss of S$2.35 million, from a year-ago net profit of S$818,857, on revenue of S$18.33 million, down 10.6 percent on-year.
No interim dividend was declared, compared with a year-ago dividend of 0.26 Singapore cents a share.
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