SINGAPORE (Nov 24): Coffeeshop operator Kimly posted earnings of $21.4 million for the full year ended September, 11.5% lower than a year ago on the back of higher expenses.
Revenue grew 11.6% to $192.1 million in FY17, from $172.2 million a year ago, mainly due to increase in the revenue contribution from the Outlet Management and Food Retail divisions.
These were largely attributable to an increase in the sales of beverages and tobacco products, an increase in sub-leasing of stalls and related cleaning and utilities services provided, as well as increased contributions from a higher number of food stalls in FY17.
However, cost of sales as a percentage of revenue increased by 1.6 percentage points to 80.0% in FY17, mainly due to an increase in employee benefits expense because of a higher number of employees for coffee shops and food stalls, as well as an increase in operating lease expense on 18 new leases entered into in FY17.
Administrative expenses rose 10% to $13.0 million, from $11.9 million a year ago. This was mainly due to higher employee benefits expenses and higher depreciation of property, plant and equipment.
Income tax expense more than doubled to $3.1 million in FY17, up from $1.4 million a year ago, as the effective tax rate increased to 12.6% in FY17 compared to 5.3% a year ago. This was mainly due to the absence of a partial tax exemption and tax relief enjoyed in FY16 prior to the group’s restructuring exercise.
As at end September, cash and cash equivalents stood at $85.1 million.
The board has proposed a final dividend of 0.68 cents, bringing the total dividend declared in FY17 to 0.96 cents.
Looking ahead, Kimly says it anticipates the F&B industry to remain challenging and signalled it will remain vigilant about controlling cost, lowering operating expenses, and increasing productivity.
“We are aware of the intense competition and tight labour situation within the F&B industry, and therefore we are adopting technology to improve work processes and maximise our manpower resources to boost productivity and operation efficiency,” says Vincent Chia, executive director of Kimly.
Shares of Kimly closed 2 cents higher at 37 cents on Friday.
