ZEN Group boosts revenue to MB3,144.2, bucking economic trend Launches 100 new branches while delivery channels grows 8-fold Cost-cutting through franchise model for new branches in 2020
Zen Corporation Group Public Company Limited (ZEN) presented an impressive 2019 performance with a revenue of 3,144.2 million baht – a 6-percent growth over the previous year through launches of new branches and 8-fold growth of delivery channels to support the fast-growing trend of online food order while the retail food product group also expanded well. For 2020, the Company will concentrate on growing franchise branches to reduce investment cost while also planning to further develop IT capability and improve cost management and expenditure potentials.
Mr. Boonyong Tansakul, Chief Executive Officer of ZEN Corporation Group Public Company Limited (ZEN) – the food service provider, revealed that, although the economy was in a flux, the Company’s 2019 performance managed to post impressive growth with a 6-percent increase in revenue to 3,144.2 million baht over 2018’s income of 2,964.7 million baht. This was due to the launches of a total of 100 branches in the year – the highest number since the business was incorporated. The healthy result was also due to the 8-fold growth on the delivery business which paralleled the lifestyle trend of the new generation of consumers who favored more convenience. The total sales through deliveries in 2019 topped 102 million baht as compared to the 2018 figure of only 13 million baht. The food retail business, such as fermented fish sauce and “Jaew Bong” chili fermented fish sauce also made considerable gain.
The 2019 net profit of 106.2 million baht was down 24 percent from the previous year’s 140.2 million baht. However, if not including two special items, namely, the estimated debt set aside for the demolition works in 2018, and the provision for loss pertaining to the closure of two branches in 2019, the Company’s net profit was down 7 percent as a result of the negative SSSG (same store sale growth) due to the slowdown in the economy.
However, the Q4/2019 performance showed a total revenue of 855.3 million baht – a 16-percent increase over the same period of the previous year’s 738.4 million baht with the opening of 37 new branches and the delivery service sale through the call center 1376 as well as the fast growth of the food-order application in the last quarter. The net profit of 18.8 million baht was down from the same period of the previous year due to the negative SSSG and the provision for loss pertaining to branch closure.
For the business direction in 2020, the Company has provisioned an investment of 200 million baht compared to 300 million baht for the past year. This is because the expansion of “Khiang” restaurant brand will concentrate on the franchise business model through agreements with regional partners rather than direct investment by the Company. It is expected that about 100-150 branches will be launched under the franchise model, thus reducing the investment cost set for last year. Moreover, the Company planned to renovate existing branches, develop IT capability and improve cost management and expenditure potentials.
“As seen in the economic trend and the swindling purchasing power, this year, we will concentrate of developing the ability to achieve profit for the Company’s existing 345 branches along with the expansion of branches under the franchise business model as well as more efficient cost management. It is expected that such a strategy will help to boost revenue and profitability rate,” Mr. Boonyong said.
