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BreadTalk Group Limited’s Latest Earnings: What Investors Should Know

Yesterday, BreadTalk Group Limited (SGX: 5DA) reported its second-quarter earnings. The reporting period was from 1 April 2017 to 30 June 2017.

The food purveyor is best known for its signature pork floss buns that it sells at its bakeries around the Lion City. Beyond the bakery segment, BreadTalk also organises its businesses into the Restaurant segment & the Food Atrium segment.

To learn more about the company, go here or head here for the previous quarter’s earnings.

Financial highlights

Here’s a quick rundown on the financial figures for the second-quarter:

1. Revenue fell by 1.5% year on year to $147.6 million. The Bakery and Food Atrium segment both experienced weaker sales.  

2. Net profit attributable to shareholders rose 61.9% year on year to $2.1 million.

3. BreadTalk’s diluted earnings per share (EPS) also rose 63% year on year from 0.46 cents in 2016’s second quarter to 0.75 cents in the reporting quarter.

4. Cashflow from operations was $15.5 million and capital expenditure was $3.7 million. BreadTalk generated free cash flow of $11.8 million.

5. As of 30 June 2017, the group had around $128.1 million in cash and equivalents and $161.7 million in debt. The latest figures are an improvement from the $112 million in cash and equivalents and $202.6 million in debt recorded last year.

Overall, BreadTalk saw sales fall, but profits improve significantly.

The food and beverage firm remains in a net debt position, but its balance sheet was in better shape. It also generated positive free cash flow for the quarter. The board of directors recommended an interim dividend of one cent per share, up from 0.5 cent a year ago.

Operational Highlights

For the reporting quarter, the bakery and food atrium segments saw revenue declines of 3.3% and 2.7% year on year respectively. Restaurant division bucked the trend with a 3.7% revenue increase.

With regards to profit, it was a different story. In terms of EBITDA (earnings before interest, taxes, depreciation and amortisation), the restaurant and bakery segment recorded decreases of 1.6% and 12.7% year on year respectively. The Food Atrium segment’s EBITDA rose by 326% year on year.   

The total number of outlets was 942, up from the 934 outlets it had last year.

Future outlook

Looking forward, BreadTalk provided the following outlook:

“The Group remains on course to consolidate underperforming operations and expand its footprint in high performing markets. While new outlet openings remain at a cautious pace, the Group will continue to focus on improving overall profitability and quality of earnings for FY 2017.”

At its closing price of $1.80 yesterday, BreadTalk traded at 24.7 times trailing earnings with a dividend yield of 1.7%.

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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 Chin Hui Leong doesn’t own shares in any companies mentioned.