Singapore’s Big Loser for the Week: Breadtalk Group Limited

Credit: hobvias sudoneighm

A big loser in Singapore’s share market this week is Breadtalk Group Limited (SGX: 5DA). Shares of the bakery and F&B (food & beverage) retail outfit had declined by 7% since last Friday to end this week at S$1.36.

In comparison, Singapore’s market benchmark the Straits Times Index (SGX: ^STI) was down 1% during the same period.

Last week, Breadtalk, which is famous for its pork floss buns that are sold in its namesake bakeries, released its financial results for the year ended 31 December 2014 (FY 2014).

Revenue for the year grew by 9.9%  to S$589.6 million but net profit came down 10.3% to S$12.2 million. Breadtalk’s net profit margin for 2014 was 2.1%; in 2013, it was 2.5%.

The decline in net profit margin was due to “intense competition in Singapore along with cost pressure on labour and rental including closure cost for 2 Ramen Play stores.” For additional details, Breadtalk’s distribution and selling expenses increased 10.4% to S$231.7 million while administrative expenses went up by 12.1% to S$71.3 million.

The firm declared a dividend of 1.0 Singapore cent for the final quarter, down from 1.3 cents last year. Including the 0.5 cents already paid out in the second quarter, Breadtalk’s total dividend for 2014 amounts to 1.5 cents, down 17% from 2013’s dividend of 1.8 cents.

At Breadtalk’s current price of S$1.36, its shares are now yielding 1.1%, taking into consideration the dividend payment for the whole of 2014.

Forging ahead, Breadtalk is looking at growing its portfolio of proprietary brands and franchise network in virgin markets like India, Myanmar, Cambodia, Japan and Australia. The company will also continue to increase its presence in core markets, especially in China, and expand into the second and third-tier cities to maintain its “first-mover advantage position”.

Breadtalk’s now valued at 31 times its FY 2014 earnings per share of 4.32 Singapore cents.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.