JustKitchen Implementing Margin Improvement After Rapid Growth Phase
TSXV: JK OTCQB: JKHCF FRA: 68Z
The Company's Margin Initiative Includes Streamlining Operations, Pursuing More B2B Opportunities, Lowering COGS, Reducing Redundancies and Renegotiating Key Agreements at Opportune Times
VANCOUVER, BC, Aug. 2, 2022 /CNW/ - Just Kitchen Holdings Corp. ("JustKitchen" or the "Company") (TSXV: JK) (OTCQB: JKHCF) (FSE: 68Z), a technology-focused and enabled operator of ghost kitchens specializing in the development of delivery-only food brands, is pleased to announce that it has initiated a heightened focus on improving margins and lowering costs (the "Margin Initiative") to bolster enterprise value. JustKitchen's mission remains to provide high-quality food, primarily on a delivery-only basis, as enabled by mobile applications, to a growing set of consumers across Asia.
The Company's officers have developed a plan to increase margins and reduce costs, the key aspects of which are highlighted below:
- Pursuing more business-to-business ("B2B") opportunities with higher margins that include large enterprises with over 4,000 employees, captive audiences and no or little upfront capital expenditures followed by low operating costs;
- Focusing on higher margin locales and consumer segments;
- Driving down cost of goods sold relative to revenue by consolidating purchasing while pricing food items in line with regional inflation levels; and
- Lowering labour costs as a percentage of total expenses.
Additional cost-cutting opportunities have been identified by JustKitchen management, including but not limited to:
- Narrowing operating hours to eliminate unprofitable time windows due to labour and other fixed costs;
- Shifting to the use of more part-time staff in locations where the knowledge from full-time employees has successfully been embedded into operations;
- Maximizing location-based profitability and potentially rationalizing the poorest performing ghost kitchen locations;
- Reducing headquarters personnel by approximately 20%; and
- Renegotiating key occupancy contracts and other material agreements.
"In a short period of time, JustKitchen has grown rapidly and now has over 30 ghost kitchen locations in multiple countries. As such, it is a great time for us to assess the business that we have built in order to enhance our strengths, address our weaknesses and make improvements. This will help JustKitchen move forward with a stronger and more valuable core, so it can continue to grow well into the future," said Jason Chen, Co-Founder and Chief Executive Officer of JustKitchen.
JustKitchen is primarily a technology-focused and enabled operator of ghost kitchens specializing in the development and marketing of proprietary and franchised delivery-only food brands for customers. The Company currently operates in Taiwan, Singapore and Hong Kong with plans to expand operations to other Asian countries. JustKitchen uniquely utilizes a hub-and-spoke operating model, which features advanced food preparation taking place at larger hub kitchens and final meal preparation taking place at smaller spoke kitchens located in areas with higher population densities. The Company combines this operating model with online and mobile application-based food ordering fulfilled by third-party delivery companies, to minimize capital investments and operating expenses and reach more customers in underserved markets. The Company's other business, JustMarket, is an e-commerce grocery delivery platform that allows customers to purchase groceries for delivery or add select grocery items to meals ordered through JustKitchen.
For more information about the Company, please visit investors.justkitchen.com. JustKitchen's final prospectus, financial statements and management's discussion and analysis, among other documents, are all available on the Company's profile page on SEDAR at www.sedar.com.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
This news release contains certain "forward-looking statements" within the meaning of such statements under applicable securities law. Forward-looking statements are frequently characterized by words such as "anticipates", "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed", "positioned" and other similar words, or statements that certain events or conditions "may" or "will" occur including but not limited to the Company's comments regarding the plan to increase margins and reduce costs. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks, including those risk factors identified in the Company's prospectus dated March 26, 2021, and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
SOURCE Just Kitchen Holdings Corp.
Just Kitchen Holdings Corp., Suite 1430, 800 West Pender Street, Vancouver, British Columbia, V6C 2V6; Nick Kuzyk, Investor Relations, Toll-Free: 1-855-JST-KCHN (1-855-578-5246), Email: [email protected]
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