TUNG LOK RESTAURANTS (2000) LTD / Annual Report
2016
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Administrative expenses, mainly manpower-related
expenses, decreased by S$0.3 million or 1.0% to S$31.5
million in FY16 from S$31.8 million in FY15 mainly due to the
absence of manpower costs from a former subsidiary (PT
Ming) disposed in FY15 and lower manpower costs arising
from the closure of two outlets. The decrease was partly
offset by salary increments and higher Central Provident
Fund contribution rates (which took effect from 1 January
2015).
Other operating expenses declined S$3.1 million or 8.3% to
S$33.4 million in FY16 from S$36.5 million in FY15 mainly
due to the absence of an allowance of S$2.5 million for
non-trade doubtful debt due from PT Ming as well as lower
utility, depreciation and utensil expenses of S$1.6 million.
The decrease was offset by higher upkeep and cleaning,
mooncake related, advertising and promotion, credit card
commission and royalty expenses amounting to S$0.9
million.
Share of profit of our Singapore-based joint venture, T & T
Gourmet Cuisine Pte Ltd, declined to S$286,000 in FY16
from S$656,000 in FY15 due to lower profitability. The Group
had lower share of profit from associate companies in FY16
as its China-based associates incurred higher losses during
the financial year.
The Group’s total assets as at 31 March 2016 decreased by
S$2.1 million or 5.5% to S$36.0 million from S$38.1 million
as at 31 March 2015. This was mainly a result of decrease
in plant and equipment of S$1.9 million and decrease in
cash and bank balance of S$1.2 million. The overall decline
was partially offset by higher trade and other receivables of
S$0.3 million, an increase of S$0.3 million in the net assets
of a joint venture, an increase of S$0.1 million in long-term
security deposit and higher deferred tax assets of S$0.3
million.
Total liabilities of the Group decreased by S$3.3 million or
13.8% to S$20.6 million as at 31 March 2016 from S$23.9
million as at 31 March 2015 mainly due to repayment of
bank borrowings and finance leases amounting to S$2.2
million as well as lower trade and other payables of S$1.4
million due to improved creditor turnover days. This was
partly offset by new finance leases of S$0.3 million.
Cash and bank balances declined to S$14.0 million as at
31 March 2016 from S$15.3 million as at 31 March 2015
mainly due to payments of S$3.0 million for the acquisition
of plant and equipment, S$0.5 million dividends paid to non-
controlling interests of subsidiaries and repayment of S$2.2
million for bank borrowings and finance leases. These were
higher than the net cash of S$4.5 million generated from
operations.
Net working capital rose to S$6.0 million as at 31 March
2016 from S$4.5 million as at 31 March 2015 largely due to
the improvement in the Group’s overall performance during
FY16. Net asset value per share as at 31 March 2016 rose to
6.11 cents from 5.83 cents as at 31 March 2015.
OPERATIONS
With the disposal of PT Ming, we channelled our focus and
resources to our operations in Singapore and China. While
rising costs have always been a challenge, we managed to
contain them during FY16. Manpower and other operating
costs stabilised while revenue improved. We shall continue to
explore and nurture concepts that encourage lean manpower
requirements and streamline our menus to improve kitchen
operational efficiencies.
As at 31 March 2016, the Group operates a total of 45
outlets, comprising 25 of the Group’s own restaurants, 9
outlets at associate level, and 11 others under management.
We also launched a home-delivery service in October 2015.
Through our online store
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users can choose from a wide variety of ready-to-eat dishes
and dim sum.
OUTLOOK AND FORWARD STRATEGY
The Group’s performance in FY16 improved compared to
FY15 notwithstanding the unfavourable economic conditions
and challenging operating environment for the F&B industry.
Business conditions are expected to remain challenging in
the next 12 months due to the uncertain economic outlook,
stiff competition as well as rising business and manpower
costs.
Amid these challenges, the Group will continue to focus
on improving revenue and managing operating costs. To
achieve this, we will seek to further enhance productivity,
capitalise on relevant government incentives and explore
additional ways to streamline operations as well as reinvent
our restaurant concepts to remain competitive.
Chairman’s Statement
