Kimly reports fiscal full-year net profit rose 2 percent on increased food retail and outlet revenue

Kimly reported late on Thursday that its fiscal full-year net profit rose 2.1 percent on-year to S$28.09 million, amid higher contributions from both its outlet management division and its food retail division.

Revenue for the fiscal year ended 30 September rose 5.3 percent on-year to S$202.21 million, the Singapore-style coffee shop operator said in a filing to SGX late on Thursday.

The outlet management division saw its revenue increase by S$2.4 million on-year, largely on higher income from increased sub-leasing of stalls and related cleaning and utilites services provided on contributions from coffee shops and drink stalls which began operating since the latter half of fiscal 2017, it said.

The food retail division’s revenue rose by S$7.7 million, mainly on increased revenue contribution from food stalls which began operations in the second half of fiscal 2017 and contributions from Tonkichi and Rive Gauche, which are the restaurants and confectionery businesses acquired in July 2018, it said.

Cost of sales also rose 5.4 percent on-year to S$162.02 million for the fiscal year, in line with the revenue increase, mainly due to increased employee benefits expense as more coffee shops and food stalls began operations, increased operating lease expense from new coffee shops and Tonkichi and Rive Gauche and an increase in the cost of goods, it said.

Kimly declared a final dividend of 0.68 Singapore cent a share, unchanged from the previous year. Including the interim dividend of 0.28 Singapore cent paid in May, the total dividend for the fiscal year would be 0.96 Singapore cent, it said.

In its outlook, Kimly was both cautious on cost pressures and positive on potential expansion opportunities.

“The group continues to face cost pressures on labor, food cost, rental cost and expansion cost. Despite these challenges, the group continues to find solutions to improve operation efficiencies, deploy new technology to help improve productivity and streamline work processes,” Kimly said.

It also pointed to expectations for new coffee shops via the new price quality model to be used by the Housing and Development Board (HDB).

“As an experienced operator, the group looks forward to securing the leases of some of those coffee shops and further expand our market share,” Kimly said.

It also noted that it has retroactively cancelled its acquisition of Asian Story Corp., with ASC’s results not consolidated into the group.

Kimly also noted that Singapore’s Commercial Affairs Department (CAD) and the Monetary Authority of Singapore (MAS) had requested documents and equipment related to its IPO and its acquisition, now cancelled, of Asian Story Corp. (ASC).

“The group will also be taking all necessary actions to alleviate any adverse impact which may arise from the regulatory orders for provision of information and documents,” Kimly said.

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