KLE Group says it has recorded its worst revenue figures since the company’s inception, due to the impact of the coronavirus (COVID-19) pandemic.
KLE operates restaurants under the brand Usain Bolt’s Tracks and Records (UBTR) and provides management services to T&R Restaurant Systems Limited, which trades as FranJam.
It was incorporated on September 8, 2008, and listed on the Junior Market of the Jamaica Stock Exchange in 2012.
For the three months ended June 30, 2020, KLE earned $7,777 in revenues, an 85 per cent reduction, when compared to $52,149 in the prior year.
By extension, revenues year-to-date have been impacted tremendously. For the January to June 30, 2020 period, total revenue amounted to $80 million compared to $102 million in the prior period.
For the months of April to June the Montego Bay location was closed and the Kingston location was opened for delivery and take-out only, KLE said.
KLE has nonetheless had some good fortune, according to CEO Gary Matalon.
The company has now received building approvals from the St Mary Parish Council to construct 88 luxury suites called Bessa Properties in Oracabessa.
“We are now in a position to begin the sales and marketing phase of the development”, he said in notes accompanying KLE’s latest financial report.
For KLE, Bessa is perfectly aligned to its key priorities which focus on providing luxury experiences in lifestyle and entertainment.
“Overall our main focus remains to return the business to a path of growth and profitability, we remain on our mission to increase shareholder value,” Matalon said in the company’s latest earnings report.
For the three months ended June 2020, KLE also reported a loss from operations as a direct result of the bad debt write off and the drastic decline in revenues in the quarter due to the coronavirus pandemic.
KLE ended the quarter in an overall net loss position after the inclusion of finance and depreciation charges and other comprehensive loss of $0.5 million.
Also during the quarter, KLE said it went into a cost-saving mode due to the COVID-19 pandemic and the declining revenue.
Average expenses for the quarter declined by 70 to 80 per cent, with salaries and wages recording the biggest decline of 87 per cent. Utility costs were cut by 60 per cent.
KLE said some of the expense reduction strategies employed included the laying off of team members, mandatory salary cuts for all staff and the decommissioning of all heavy-duty equipment.
KLE said the changes made will have a positive impact on the financial performance of the business in the third quarter without jeopardizing the operating standards it has worked so hard to build.
“Through support from the board, committees and loyal team members we have been able to restructure the senior management team to better align with the current environment we’re operating in.”
Total assets as at June 30, 2020, amounted to $278 million compared to total liabilities of $223 million.
The increase in non-current liability is as a result of the addition of the related party loan which was used to acquire the Montego Bay location.
KLE also reported negative cash flow from operation and investing activities, which is due mainly to the purchase of assets and increases in advances made to associated company. There was a positive cash flow from financing activities due to the related party loan.