10 Things to Know About Kimly Ltd’s FY2017 Earnings

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Kimly Ltd (SGX: 1D0) is the largest traditional coffee shop operator in Singapore with a network of 68 food outlets and 129 food stalls. Last Friday, the company announced its financial results for the financial year ended 30 September 2017 (FY2017).

Here are 10 things investors should know from the earnings announcement:

1. Revenue for the year increased 12% year-on-year to S$192.1 million due to broad-based revenue growth in both its business divisions – Outlet Management and Food Retail.

2. The Outlet Management division posted higher revenue mainly due to an “increase in rental income from the sub-leasing of stalls in the coffee shops that it manages, and the provision of cleaning and utilities services”. Sales of beverages and tobacco products went up due to an increase in the number of coffee shops and drinks stalls for the year. The Food Retail division’s revenue rose due to higher sales of cooked food as the number of food stalls increased in FY2017.

3. The firm’s food outlets under management was at 68 in FY2017, up from 63 in FY2016. Meanwhile, the number of food stalls went up to 129 during the latest period, an increase from 115 stalls last year.

4. Gross profit grew 3% to S$38.4 million.

5. Profit attributable to shareholders, however, declined 12% to S$21.4 million. The fall was mainly due to higher operating expenses and tax expense.

6. Diluted earnings per share fell from 2.10 Singapore cents last year to 1.85 cents in FY2017.

7. As of 30 September 2017, cash and cash equivalents stood at S$85.1 million, with no debt. A year ago, the firm had a cash balance of S$29.4 million and negligible debt. The increase in cash hoard for FY2017 was mainly due to proceeds from the firm’s initial public offering in March this year.

8. Kimly generated cash flow from operating activities of S$29 million. With capital expenditure coming in at S$4.4 million, the firm raked in free cash flow of S$24.6 million. In comparison, it brought in S$26.7 million in free cash flow last year.

9. The board of directors has proposed a final dividend of 0.68 Singapore cent per share. Including the interim dividend of 0.28 cent per share already paid out, the total dividend for FY2017 would be 0.96 cent per share.

10. The coffee shop operator foresees the food and beverage industry to remain challenging. Therefore, it is “vigilant about controlling cost, lowering operating expenses and increasing productivity”. It anticipates continued growth in its business and to remain profitable in FY2018.

Kimly’s shares are now changing hands at S$0.36. This gives a trailing price-to-earnings ratio of 20 and a dividend yield of 2.7%.

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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 Sudhan P doesn’t own shares in any companies mentioned.