SINGAPORE (Aug 1): BreadTalk recorded a 35.3% fall in 1H19 earnings ended June to $2.3 million, compared to $3.6 million in 1H18.
The weaker bottomline was mainly the result of an increase in the group's distribution and selling expenses, which was 39.4% higher at $169.2 million from $121.4 million last year.
In addition, the group saw the inclusion of leases expense of $7.3 million in 1H19 due to the adoption of the new SFRS(I) accounting method.
Revenue for 1H19 saw a 7.9% increase to $321 million from $297.4 million a year ago.
Bakery Division revenue rose 2.8% y-o-y to $142.8 million with the consolidation of revenue from the group’s Thailand Bakery business following the acquisition of the 50% interest in BTM (Thailand) from Minor Food Group.
Food Atrium Division revenue grew 2.5% to $78.3 million. The division opened three direct-operated restaurants (DOR) in Shanghai, Hong Kong and Bangkok respectively under the “Sergeant Kitchen” brand.
Restaurant Division revenue rose 14% y-o-y to $84.5 million, with the addition of four more outlets – three in Singapore (Great World City, Marina Bay Sands and Jewel Changi Airport) and one in Thailand (Terminal 21).
4orth Division, the group's food concept division to create new F&B concepts and foster partnerships with established brands, delivered a revenue of $13.2 million for 1H19 compared to $5.7 million for 1H18. The period saw the commencement of Song Fa Bak Kut Teh operations in Beijing, Guangzhou and Bangkok, as well as the deepening of the brand’s presence in Shanghai. Wu Pao Chun opened its first outlet, while Nayuki opened its second outlet in Singapore during the second quarter.
As at end June, the group’s cash and cash equivalents stood at $128.1 million.
The group is recommending an interim dividend of 0.5 cent per share, which will be payable on Aug 21.
In its outlook statement, the group says it will continue to focus its resources in the expansion of key markets. It expects the Food Atrium Division to deepen its penetration in China, Hong Kong, Taiwan and Cambodia.
The Restaurant Division will also be cautiously adding to its presence in Singapore and Thailand while managing the challenges in the United Kingdom.
Meanwhile, it will continue to fine-tune the businesses within its 4orth Division to improve overall profitability.
Efforts to turnaround the Bakery business, particularly in China and Thailand also remain underway, while the group continues to build on the strong performance of the business in Singapore.
Shares in BreadTalk closed at 2.14% higher at 72 cents on Thursday.
