Oversea confident of improved performance in FY15

KUALA LUMPUR: Food service provider Oversea Enterprise Bhd, which expects its concept cafés to contribute 15% of group revenue within the next three years, is confident of a more profitable year in the current financial year ending March 31, 2015 (FY15) compared with FY14 driven by improved same-store sales and promotional activities.
Executive director Yu Tack Tein (pix) said the group, which owns and operates the Restoran Oversea chain, rebounded in FY14 with a net profit of RM3.5 million after posting a net loss of RM4.5 million in FY13.
"Moving forward, we're looking at a growth in profit compared with FY14. For the past few months of business, we're confident that we can grow further from last year," he told a press conference after its AGM here yesterday.
However, in 1Q15, it saw a net loss of RM760,000, which Yu said was mainly due to the closure of a restaurant in the group's final round of consolidation.

"If we normalise that, our performance is better than last year. This is a one-off non-recurring event," he said, adding that Oversea consolidated its restaurant business in the last two years and closed three restaurants in Jaya One, Petaling Jaya, Centrepoint, Petaling Jaya and Singapore.
He said the group will embark on a balanced expansion for its restaurant and manufacturing segment, currently at a 80:20 ratio of revenue, and has allocated RM2 million to RM2.5 million in FY15 for new restaurants and new machineries.
"Manufacturing is an important business and every year our moon cake products contribute 15% to 20% to group revenue. For the export market, 10% of our production is exported to US and Australia.
"As long as it doesn't hurt our cash flow too much, and it gives us more room to grow, we're willing to have more contribution from manufacturing but at the moment, we're comfortable to remain at about 20% to 25%," said Yu.
Oversea is exploring the option of opening smaller-scale restaurants under the Restoran Oversea brand with about 3,000 to 5,000 sq ft to accommodate 300 to 500 pax, compared with a seating capacity of 500 to 1,100 customers currently.
To date, the group owns and operates six Restoran Oversea outlets, namely four in the Klang Valley and two in Ipoh, Perak.
The ACE Market-listed group has also allocated RM500,000 in capital expenditure to open another Tsim Tung outlet, its concept cafes that serves Hong Kong and Western fusion cuisine, within the Klang Valley in FY15.
With the new Tsim Tung outlet, its third, Oversea is optimistic that its concept cafes will be able to contribute 15% of group revenue within the next three years. For FY14, Oversea's concept café outlets contributed 10% to its total group revenue.
Oversea also operates the Oversea Dian Xin in Sri Petaling, Kuala Lumpur and Otak-otak Place in Tropicana City Mall, Petaling Jaya and plans to establish a new chain of halal concept cafes by FY15.