Kimly, the operator of coffee shops, has started buying back its own shares following a fresh mandate given by shareholders. On Feb 15 and Feb 20, Kimly acquired 500,000 shares at 34 cents each and 379,800 shares at 33.5 cents each respectively.
On Nov 24, Kimly reported revenue for FY2022 ended September 2022 rose 33.1% to $317.7 million, thanks to a $73.5 million contribution from a newly acquired business, fried chicken chain Tenderfresh. However, without a similar level of government support to help local businesses tide through the pandemic, Kimly reported a 13.4% drop in earnings to $34 million from FY2021’s $39.3 million.
Kimly has declared a final dividend of 1.12 cents per share. Adding this to the interim dividend of 0.56 cents already paid in 1HFY2022 ended March 30, 2022 brings total payout for FY2022 to 1.68 cents per share, equivalent to a payout ratio of 61.4%.
In its earnings commentary, Kimly says that the F&B industry remains “highly competitive” even as costs ranging from labour to utilities continue to climb.
In addition, inflationary pressures have driven up costs of raw materials too. “The high operating cost pressure is expected to plague the F&B sector in 2023,” the company warns.
Furthermore, as more people return to the office after the pandemic, Kimly says it will see a decline in footfall to its coffee shops, which are predominantly located in the heartlands.
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Kimly says it will focus on “reinventing” its offerings to meet changing consumer preferences. Kimly says it is “mindful” that consumer sentiments may be dampened by recessionary fears arising from the uncertain global economic outlook. “Thus, we will keep a close watch on the changing business landscapes and recalibrate our business strategies accordingly,” it adds.
Property counter trading below NAV
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Ho Han Khoon, alternate director to non-executive chairman Ho Han Leong of First Sponsor Group, has increased his stake in the company.
On Feb 20, Han Khoon acquired 85,000 shares from the open market for a total of $111,977. This works out to an average of $1.32 each and brings his direct stake to nearly 3.99 million shares or 0.43% of the company. Together with his deemed stake in another 31.03% of the company, this brings his total stake to 31.46%.
Separately, Han Leong on Feb 20 acquired 800,000 warrants for a total $48,000.
As at Dec 31, 2022, First Sponsor Group’s net asset value per share was 195.95 cents, slightly lower than 202.39 cents as at Dec 31, 2021.
First Sponsor is a property company 45.63% owned by Tai Tak Estates and 35.72% held by City Developments. It has stakes in property development and hospitality, and is active in various markets including China and Europe.
On Feb 17, First Sponsor reported earnings of $59.9 million for the 2HFY2022 ended Dec 31, 2022, up 14.1% over 2HFY2021’s $52.5 million, led by higher contribution from its associates. This brings FY2022 earnings to $131.3 million, up 8.1% from FY2021.
Revenue, on the other hand, was down 27.4% y-o-y to $427.5 million due to lower revenue from sale of properties, property-financing and rental of investment properties.
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“Property development remains the key business segment of the group. The group, on its own and with joint venture partners, made a record purchase of four development land plots (all of which are in Dongguan) in FY2022,” says Neo Teck Pheng, group CEO of First Sponsor.
The company plans to pay a final dividend of 2.70 cents, up from 2.35 cents last year. This will bring total FY2022 payout to 3.8 cents, a record high.
“Backed by a strong balance sheet, substantial potential equity infusion from the exercise of outstanding warrants and unutilised committed credit facilities, the group is ready to capitalise on any good business opportunities when they arise,” says Neo.
