In line with the increase in revenue, cost of sales which comprised raw materials and consumables used increased by 5.7% to $53.2 million in FY17. Cost of sales as a percentage of revenue remained stable at 37% in both FY17 and FY16.
Employee benefits expense increased by 6.4% to $41.8 million mainly due to an overall increase in employee headcount and remuneration to support its regional expansion.
Operating lease expenses increased by 16.7% to $13.9 million mainly due to the additional floor space for the group’s new outlets, outlet expansion and new corporate offices in Singapore and Shanghai.
Jumbo is proposing final and special cash dividends of 0.5 cent and 0.7 cent respectively. Including interim dividend, the total dividends will be 1.7 cents.
In its outlook, Jumbo says the F&B industry is expected to continue to be challenging due to pressure on operating costs and keen competition.
“The group will continue to focus on cost rationalisation and improving work flow processes, manpower utilisation and information technology applications to increase productivity, efficiency and lower operating costs,” says Jumbo, “This is especially pertinent in light of reduced government grants such as the wage credit scheme and productivity and innovation credit scheme.”
Shares in Jumbo closed at 58 cents on Friday.
