No Signboard Holdings Ltd is set to be the newest company to be listed on Singapore’s stock market. In its initial public offering (IPO) prospectus, the company highlighted four ways it would be trying to grow its business. Let’s look at two of them here. Establish a new restaurant chain The restaurant company – which currently runs the No Signboard chain of Chinese restaurants – said that it has plans to establish a new chain of Chinese restaurants under a new casual dining concept. The new concept would be located in satellite towns and residential areas and would be targeting a…
No Signboard Holdings Ltd is set to be the newest company to be listed on Singapore’s stock market. In its initial public offering (IPO) prospectus, the company highlighted four ways it would be trying to grow its business.
Let’s look at two of them here.
Establish a new restaurant chain
The restaurant company – which currently runs the No Signboard chain of Chinese restaurants – said that it has plans to establish a new chain of Chinese restaurants under a new casual dining concept.
The new concept would be located in satellite towns and residential areas and would be targeting a customer segment that is typically younger and more family-oriented when compared to the No Signboard brand. No Signboard is a premium seafood restaurant that the company believes appeals mostly to tourists and working adults. No Signboard Holdings thinks that the new concept would complement its existing business.
No Signboard Holdings is currently in the process of developing the new dining concept and is exploring potential locations, two of which are Jurong East and Punggol. The company intends to launch the new brand with two new outlets in the second half of 2018.
No Signboard Holdings will be using around S$5 million of its net IPO proceeds to establish this new chain of casual dining restaurants.
Develop its beer business
No Signboard Holdings entered the beer business in 2017 and currently owns the Draft Denmark brand of premium beers. It is also an OEM (original equipment manufacturer) beer supplier for third-party brands. The company is looking to develop its beer business further by expanding its range of beers and by establishing its own brewery.
The expansion of the range of the company’s in-house beer brands is to cater to discerning consumers. On top of this, the company is also looking to increase its OEM sales since it will give rise to recurring cash flows as contracts are usually signed for up to three years.
Furthermore, No Signboard Holdings is planning to launch its beers in bottled formats by the end of this year as it is looking to increase beer sales through retail channels, such as supermarkets. The company will leverage on a newly established distribution arrangement with Yeo Hiap Seng Ltd (SGX: Y03) to achieve this. No Signboard has plans to launch its beers in a small-can format (330 ml) next year too, depending on consumer demand.
The company’s intention to establish a beer brewery is to control quality and costs. The new brewery will also allow No Signboard Holdings to “experiment with brewing methods and flavours to develop new varieties of bespoke and craft beers, as compared to our current third party brewing and packaging arrangements with external breweries.”
No Signboard Holdings is exploring a few locations in the Indonesian islands of Bintan and Batam for its brewery. The brewery will have a production capacity of nearly 100,000 hectolitres of packaged beer per year. The company hopes to pin down details for the brewery and secure a suitable joint venture partner next year. Commercial production is scheduled to commence three years after the start of the brewery’s construction.
The establishment of the new brewery is expected to cost around S$25 million. Around S$10 million of the company’s net IPO proceeds will be used to fund the project. The remaining sums will come from “other sources, such as operating cash flows, bank borrowings and/or contributions by the joint venture partner.”
To learn more about No Signboard Holdings’ IPO, you can head here. I will be sharing the other two growth avenues for No Signboard Holdings in the coming days, so stay tuned!
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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.