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10 Things to Know About No Signboard Holdings Ltd’s Latest Earnings

No Signboard Holdings Ltd (SGX: 1G6), which went public last month, has been operating for more than 30 years and has three main business segments – restaurant, beer, and ready meal.

Yesterday, the food and beverage outfit 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 rose from S$22.7 million last year to S$24.4 million in 2017, a growth of 7.3% year-on-year. Revenue contribution from beer sales was slightly offset by sales decline at its restaurants.

2. Restaurant sales decreased 6.3% year-on-year to S$21.3 million. Sales at The Central @ Clarke Quay outlet was robust, going up by around 29.5%. However, sales at the Esplanade outlet and the Vivocity outlet fell by 16.6% and 0.5% respectively. Even though the overall customer numbers slumped by 15.9%, its “restaurants continued to attract more tourists whose higher purchasing power helped increase the average customer spend” from S$94 per customer last year to S$104 per customer in the latest year.

3. The beer business, which was acquired in June this year, brought in S$3.1 million for the four-month period.

4. Even though revenue went north, earnings went south. Net profit attributable to shareholders fell 1.3% year-on-year to S$7.7 million, mainly due to increases in raw material and consumables costs, staff cost, and other operating expense.

5. Net margin for FY2017 was at 31.7%, down from 34.4% last year.

6. The balance sheet weakened for the year. As at 30 September 2017, the firm had S$0.29 million in cash and bank balances, and total borrowings of S$0.81 million. This translates to a net debt position of around S$0.51 million. In comparison, on 30 September last year, No Signboard Holdings had S$0.67 million in cash hoard with no debt.

7. Return on equity for 2017 came in at 45.8%, down from 85.7% in FY2016.

8. Cash flow from operations was at S$4.8 million and S$0.21 million was spent on capital expenditure. Therefore, the company brought in S$4.6 million in free cash flow for the latest year, a decline from S$7.2 million raked in a year ago.

9. No dividend was declared for the year, but according to its initial public offering prospectus, it intends to dish out at least 30% of its net profit after tax in 2018 and 2019 as dividends.

10. Looking ahead, the firm said that it is working on two new casual dining concept restaurants that will be launched in FY2018. It is also talking to third parties to establish its own brewery to “achieve a more cost-efficient production and faster response time to market”. As for its ready meal business, it will “consider other distribution channels when such opportunities arise.”

At the current price of S$0.265, No Signboard Holdings is selling at 15.7 times its FY2017 earnings.

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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.