Jumbo Group lowers guidance as coronavirus impacts key markets
Its board says its working capital position remains healthy.
Jumbo Group is expected to report a lower profit after tax for the six-month period ended 31 March 2020 compared to the same period last year due to the impact of COVID-19 on its business operations in Singapore and China.
“In order to stop the spread of the COVID-19 virus, the Chinese government began imposing various measures to restrict the movement of people in January 2020. As a result, footfall in malls, and correspondingly, our outlets in China located in those malls, fell significantly,” the group said in a statement sent to the ASX.
For Singapore, they observed a decline in the number of customers during the Chinese New Year period as the country started to report new COVID-19 cases.
“Topline trend worsened with the banning of new visitors from China (one of our key customer groups) from end-January and the stepping up of border controls in February and March 2020 which substantially reduced the number of tourists coming to Singapore,” the group added.
The decline in revenue, along with the minimal reduction in rental expenses and less than proportionate decrease in staff costs, led to a much depressed bottom line for the second quarter of FY2020 for the group.
“Although our profitability had declined significantly, the Directors believe that our working capital position remains healthy with minimal bank borrowings. However, there are significant uncertainties in assessing how long the pandemic would last and its impact. As such, the Group’s current key priority is to preserve cash to support working capital requirements until COVID-19 situation improves,” it said.
Jumbo Group will release its unaudited financial results for 1H FY2020 on or before 15 May 2020.
