I got my annual food junction annual report yesterday and had a read. A year ago I wrote that this could be a value play, but only if management sort out their biggest bugbear:Operating Lease cost.
Since then they have expanded their Mediterranean restaurant MEDZ, LP+ Tetsu and other new food themes.
The net profit went down from 2.6 mil to 916k. What can we mainly attribute to? a 22% increase in operating lease expenses and a 25% in staff costs.
The more i see companies like Tung Lok, Thai Village and Food Junction, i wonder why people say you can surely make money with food. It seems that hiring high grade chefs and premium location doesn’t mean you can sell and maintained your profit margin.
Getting tired seeing my 2003 dividend payout of 6 mil go down to 318k in 9 years. Talk about slowly bleeding.