Wednesday, February 26, 2020

ZEN posts 71.4% earnings growth to Bt140.2m.

Mar 01. 2019
Boonyong Tansakul, Chief Executive Officer of Zen Corporation Group
Boonyong Tansakul, Chief Executive Officer of Zen Corporation Group
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By The Nation

ZEN, a food service company, has set its sales growth target between 15 and 20 per cent for 2019 and expects enhanced profitability, the company said in a press release on Friday.

The company said it posted impressive FY2018 results, with earnings at Bt140.2 million (up 71.4 per cent) and total revenue at Bt2.96 billion, a healthy growth driven by the constant launch of new restaurants, the introduction of delivery service, the adjustment of management strategy, the upgrading of service quality aimed at raising sales to the target level and an average sales growth at 4.7 per cent for the existing restaurants.

Boonyong Tansakul, Chief Executive Officer of Zen Corporation Group PCL (“ZEN”), said that ZEN is working to raise its revenue by 15-20 per cent in FY2019 by opening new restaurants and pumping up revenue from connected businesses, e.g. delivery, retailing, and to keep improving its profitability by ensuring an effective control of costs and expenses. 

He added that the it expects to raise its profitability to the same level as that of the food industry as a whole within three years.

For FY2019, ZEN has allocated a budget of more than Bt230 million to finance the launch of new restaurants with both existing and new designs (those with the new design will be smaller in size and require smaller capital injection), the renovation and improvement of the existing restaurants and the upgrading of the IT infrastructure, to ensure that it will reach its revenue and earnings growth targets. 

The directly-owned restaurants to be launched this year will total approximately 36.

“With our plan, we are confident that we will successfully maintain growth momentum as built up in FY2018. We own as many as 12 Thai and Japanese restaurant brands to attract target consumer groups with different levels of purchasing power, and we have introduced delivery service as an additional option for the consumer”, noted he.

Yupaphan Ekasittikul, Chief Financial Offier, said ZEN’s outstanding earnings and revenue growth rates for FY2018, with earnings at Bt140.2 million (a 71.4 per cent Y-o-Y rise from Bt81.8 million) and total revenue at Bt2.96 billion (a 17.9 per cent Y-o-Y rise from Bt2.51 billion), the highest revenue level since ZEN’s inception.

She attributed the growths to:

1. a 4.7 per cent Y-o-Y growth on average in sales from the existing restaurants following the regular introduction of new delicacies to the market, the adjustment of the company’s management strategy and the upgrading of service quality;

2. the relentless supply of new restaurants by ZEN and its franchisees; 

3. the introduction of the businesses involving provision of delivery service and retailing of ready-to-cook and ready-to-eat food products to make ZEN’s product offerings fit the consumer’s lifestyles seamlessly; and 4. the better management of selling, general and administrative (or SG&A) expenses and the rejig of ZEN’s logistics system involving the selection of professional providers with specific expertise.

“Our investment in the improvement of our internal management system bore fruit last year, with the return on sales ratio jumping to 4.7 per cent. We are confident of our ability to raise the ratio even further in the future”, she said.

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