No Signboard Holdings reports fiscal year net loss more than doubled

The No Signboard Seafood outlet at VivoCity mall in Singapore; taken in 2018.The No Signboard Seafood outlet at VivoCity mall in Singapore; taken in 2018.

No Signboard Holdings reported Friday its fiscal year net loss widened to S$4.85 million from S$2.32 million in the previous year on lower revenue from the namesake seafood restaurants and from the beer operations.

Revenue for the year ended 30 September fell 10.3 percent on-year to S$25.49 million, the iconic chili crab restaurateur said in a filing to SGX.

“Revenue from the seafood restaurants was lower in FY2019 due to a reduction in average spending per customer by approximately 6 percent year-on-year coupled with loss of revenue from the temporary closure of a seafood restaurant outlet for a month to carry out major repair works,” the company said.

“Revenue from beer segment declined significantly in FY2019 due to increased competition in the industry,” it added.

Hotpot and quick serve restaurants (QSR), which began operations in the first quarter of the fiscal year, contributed around S$3 million in full-year revenue, the filing said.

Raw materials and consumables used fell 3.2 percent on-year to S$8.61 million on lower revenue from the seafood restaurants, while the food costs consumption for the hotpot and QSR restaurants are higher compared with the seafood outlets, No Signboard said.

Operating lease expense rose 31.1 percent on-year to S$3.73 million, other operating expenses increased 20.3 percent on-year to S$5.62 million and employee benefits expense grew 22.3 percent on-year to S$10.39 million, No Signboard said.

“The expansion in restaurant segment in first quarter 2019 led to the overall increase in employee benefits, operating lease and other operating expenses including higher professional fees,” the filing said. “Coupled with the pre-operating costs incurred in first and fourth quarters of 2019 for the opening of new hotpot and quick-serve restaurants, this resulted in higher expenses.”

No Signboard did not declare a dividend, compared with a 0.26 Singapore cent dividend a year earlier.

In its outlook, No Signboard was cautious.

“Whilst the group’s seafood restaurant business continues to be profitable, the group faces challenges arising from the decreasing average spend per customer and a weak Singapore economy. The group continued to be burdened by higher overhead and startup costs for the new businesses in hotpot and quick-serve restaurants,” No Signboard said.

The company said it would continue to explore suitable opportunities to expand its food and beverage business in Singapore and overseas, adding its cash position of S$15.8 million would provide support during the gestation period of the expansion.

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