Chairman's Statement
Extracted from 2007 Annual Report
Think Sushi, Think Sakae
Whetting big appetites
Eleven years ago, when I started the first Sakae Sushi outlet at
OUB Centre in the middle of the 1997 Asian Financial Crisis,
many thought I was crazy. On opening day, I remembered I was
still in the restaurant at 4am in the morning putting in place a
type-written menu. From 8am till midnight, the four of us got to
work doubling up as chef, wait staff, cleaners and cashier.
Fast forward to September 2007 - The team of four has grown
into a family of 1,200 Pals. Our flagship brand - Sakae Sushi --
has taken Singapore by storm. We celebrated Sakae Sushi's 10th
Anniversary last year. Today, we have more than 30 outlets in
Singapore, making us the biggest Japanese casual dining chain
here. We also have about 30 restaurants in six other countries
covering 11 major cities. Looking back I could not have done
this if my big family of 1,200 Pals worldwide did not share the
same crazy vision and passion that I have.
With a proven business model and a core team of passionate
and dedicated professionals, we are well poised to embark
on the exciting marathon of taking Sakae Sushi global. When
people anywhere in the world think of sushi, we want them to
think of Sakae Sushi.
To achieve this, we expanded and ventured into new
territories including Hong Kong, Chengdu, Penang
and Selangor, planting a total of 11 Sakae Sushi outlets
overseas. I am also proud that we became one of the first
local food and beverage company to set foot on the Big
Apple, New York City. My congratulations and thanks to
the teams who made it happen.
While Sakae Sushi remains as the main focus, we
continued on the innovation path and launched five new
brands - Sakae Teppanyaki, Hei Sushi, Sakae@Campus,
Sakae Pizza and award-winning Sho-U, a modern
Japanese restaurant.
Riding on the wave of growth
Even as we raced to achieve our vision, we posted record
revenue of $83.8 million in 2007, fuelled mainly by strong
sales growth of Sakae Sushi, both locally and overseas.
On the home front, sales grew steadily by 15.9% to
$72.3 million while contributions from overseas soared
169.7% to $11.5 million from $4.3 million previously.
Despite the excellent showing of sales, full year earnings
dropped 55.5% to $2.3 million. This was largely due to a
one-off exceptional increase in professional fees related to
the Thai Village Voluntary Conditional Offer and higher
costs incurred by newly start-up overseas subsidiaries.
This was further negated by rising salary costs, rental
and utilities expenses that many in the industry too
experienced. While this may seem disappointing, I
assure you we are taking steps to address the rising costs
so as to minimize erosion of profits.
What’s cooking?
Moving forward, there will no doubt, be challenges.
However, I am confident we can rise to the challenge,
having weathered many crises including the Financial
Crisis, SARS (Severe Acute Respiratory Syndrome) and
Bird flu.
2008 will be a very significant and exciting year for us
as we celebrate our 5th year of listing on the Singapore
Exchange.
To grow our topline and bottomline, we will embark on
four strategies:
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Enhance local same store growth |
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Amidst the intense local competition, we aim to improve
the same store growth of outlets that are opened for more
than a year by lowering cost of sales. We are constantly
looking for new ways to reap economies of scale while
meeting, if not exceeding strict food safety standards in
the countries that we operate in. |
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Build profitable overseas outlets |
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In the coming year, we will continue to strengthen our
foothold overseas focusing on Malaysia, China and the
US. Successful brands that have taken flight locally may
be pilot tested in countries where we have a substantial
presence and strong brand equity has been established.
This will enable us to reap economies of scale. |
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Develop markets in new territories |
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With an increasing global craze for healthy food,
Japanese cuisine needs no introduction as the healthier
choice. People the world over are craving for good
quality Japanese food at the best value. This is where
Sakae Sushi can fill the gap, anywhere in the world. We
are currently studying new markets including the Middle
East, Vietnam, Mongolia and Central Europe and we
hope to enter new territories in 2008. |
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Create new winning brands |
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nurture these brands so that they can be another Sakae
Sushi. Thus far, Sakae Teppanyaki shines amongst the
stars and we will be opening our first overseas outlet
in Malaysia this year. Hei Sushi, set to be Singapore's
first halal conveyor belt restaurant, is another promising
brand that will allow us to tap the halal F&B sector in
Singapore and overseas. |
Gampai to healthy food, healthy mind, healthy life!
Having come thus far, we want to thank our shareholders,
customers, big family of employees and other stakeholders
for the neverending support.
We hope to do our part in educating the young about
eating healthily through the Sakae@Campus brand and
Sakae Junior Club. And we will continue to support the
community through outreach programmes targeted at
the MINDS clients, elderly and youths on the fringe.
Join me as we toast to more growth and exciting years
ahead!
Douglas Foo
Chairman and Chief Executive Officer |
