Thursday 28 Mar 2024
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KUALA LUMPUR: OldTown Bhd’s cafe outlets see sales contracting 19% for the first quarter ended June 30 (1QFY15). This has dragged its quarterly net profit to RM9.49 million or 2.15 sen per share, down 19% from RM11.7 million or 2.58 sen per share in the previous corresponding quarter.

Its revenue declined 6.5% to RM94.06 million during the quarter under review, from RM100.58 million in 1QFY15.

Despite a drop in sales in the cafe chain, which represents 49.5% of total sales, OldTown’s revenue from beverage manufacturing rose10.3%. Beverage manufacturing represents the remaining 50.5% of its sales.

OldTown said outlook for both its cafe chain and beverage manufacturing segments remain competitive and challenging. Nevertheless, it will continue to invest in advertising, promotions and marketing to strengthen its brand name.

It said its business model allows it to mitigate raw material price fluctuations while preserving margins, and also allows further market share growth without more investments in sales, marketing and logistics.

OldTown has 241 cafe outlets, of which 210 are in Malaysia.

 

This article first appeared in digitaledge Daily, on August 28, 2015.

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