Old Chang Kee fiscal 1Q profit after tax drops 53 percent

Old Chang Kee outlet at Suntec mallOld Chang Kee outlet at Suntec mall

Old Chang Kee reported Wednesday its profit after tax dropped 52.6 percent on-year to S$593,000 on changes to accounting for leases and lower revenue.

Revenue for the quarter ended 30 June slipped 2.9 percent on-year to S$21.68 million, the iconic curry puff maker said in a filing to SGX.

“Revenue from retail outlets decreased by approximately S$868,000 or 4.0 percent mainly due to the absence of revenue from closed outlets and a decrease in revenue from existing outlets, partially offset by revenue contribution from new outlets,” Old Chang Kee said.

The number of outlets in Singapore fell to 89 by end-June, from 90 in the year-ago period, the company said.

Revenue from other services, such as delivery and catering,, rose 49.8 percent on-year to S$665,000, on higher delivery contributions, the filing said.

The gross profit margin fell to 63.3 percent in the quarter from 64.7 percent in the year-ago period on higher labor costs and higher food costs as raw material prices rose, Old Chang Kee said.

Depreciation for right-of-use assets was S$2.23 million for the quarter on changes to accounting for leases, the filing said.

“The group will continue with its efforts to drive operational efficiencies, and to enhance its brand positioning, amidst the challenging retail conditions,” Old Chang Kee said. “On the current local operations, the group expects rental, labor and raw material costs to remain high in the next reporting period and the next 12 months, and believes that the labor market will continue to remain tight.”

It added that customer response and press reviews of its first U.K. outlet, in Covent Garden, London, were positive, but fixed costs were high.

“Currently, the group is on the lookout to open more retail outlets in Central London which will help to improve brand visibility and to achieve economies of scale,” Old Chang Kee said.

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