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Tough times ahead for F&B industry.

Sunday, July 7, 2013

The rapid influx of foreign workers up till the last General Election caused strains in our society in many ways and the PAP government learned the hard way that Singaporeans were unhappy.

Singaporeans "dealing with the strain on infrastructure resulting from the influx of foreign workers, had signalled that they were prepared to trade off a bit of growth in return for a reduction in immigration.

"Any elected government has to, at the end of the day, take into account and work according to the wishes of the people," Mr Shanmugam, Minister for Foreign Affairs and Law, said.

"... some of the service sectors, like restaurants, are feeling the pinch... "

(Source: The Business Times Weekend, July 6-7, 2013)

There could be pockets of relative strength in the F&B industry in Singapore and I believe Old Chang Kee is one such company.

Companies which run restaurants requiring big floor areas for diners, teams of waiters and waitresses, cooks and washing staff will face stronger headwinds over time.

Related posts:
1. Old Chang Kee: Almost 70c a share.
2. Soup Restaurant: Almost fully divested.

"In the financial year ended March 31, 2013, Tung Lok sunk deeper into the red with a net loss of $3.17 million... "

(Source: Tung Lok plans 2 for 5 rights issue, The Business Times Weekend, July 6-7, 2013)


yeh said...

Sometime me n family go restaurant for dinner,
Still have to wait for at least 15-30min for a table.
I still see there are many people dining out leh.

AK71 said...

Hi yeh,

During my last few visits to Soup Restaurant, I got the feeling that they were understaffed.

When I went to Manhattan Fish Market the last two times, I got the same feeling.

The demand from diners might be strong but if the restaurants cannot deliver due to a lack of manpower, it is bad news for the restaurant owners. :(

INVS 2.0 said...

Competition for jobs is not at the lower end sector. Those are FW - Foreign Workers.

But Singaporeans don't like FT - Foreign Talents - competing for HIGHER-END jobs in the PMET sector, or white-collar.

Singaporeans would like to see restriction on PMETs where the FTs are fiercely competing with locals, not FWs.

AK71 said...

Hi INVS 2.0,

I think you should write a letter to Mr. Shanmugam. I think he misunderstood!

The restaurant owners will thank you! ;)

AK71 said...

Tung Lok Restaurants (2000) said it was planning a two for five rights issue of up to 56 million new shares to raise $8.96 million in gross proceeds.

A shareholder of five Tung Lok shares will be invited to subscribe for two rights shares at 16 cents each.

The issue price represents a 23.81% discount to the closing price of $0.21 a share on the Catalist on July 3,2013.

Zhou Holdings, which holds a 38% stake, has given its undertaking to subscribe to its entitlement. This is provided its stake in Tung Lok does not exceed 39% of the enlarged share capital on completion of the issue as it does not want to have to make a mandatory general offer under The Singapore Code on Take-overs and Mergers.

The Edge
Friday, 05 July 2013 14:06

Anonymous said...

Indeed Singapore is overcrowded. I don't even bother to search for seats in MRT nowadays. Getting a seat is like striking 4D.

AK71 said...

Hi Vanson,

Actually, I prefer to remain standing if I were to take the MRT. Then, I wouldn't feel obliged to give up my seat (if I were to have a seat). ;)

Anyway, this is a strong reason for having a car! ;p

AK71 said...

Old Chang Kee Ltd.'s revenue increased from approximately S$32.2 million for the period from 1 April 2012 to 30 September 2012 to approximately S$34.9 million for the period from 1 April 2013 to 30 September 2013, an increase of approximately S$2.6 million or 8.2%.

The Group's profit before tax increased from approximately S$2.4 million in 1H2013 to approximately S$4.3 million in 1H2014, an increase of approximately S$1.9 million or 81.3%.

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