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10 Things To Know About Koufu Group Limited’s 2018 First-Half Earnings Update

Food court operator Koufu Group Limited (SGX: VL6) went public in July this year. Two weeks ago, the company, which manages food courts, coffee shops, F&B stalls and kiosks, and restaurants, released its first earnings update since its listing. Here are the key points to take away from Koufu’s half-year report card:

1. Revenue in the first half of 2018 increased 2.1% to S$109.2 million from S$106.9 million a year ago. This was due to stronger contributions from both the outlet and mall management, and F&B retail segments. There was a year-on-year increase in the number of outlets in both segments.

2. Below is a table summarising all the outlets that Koufu operates under its two main segments:

Source: Koufu 2018 first half earnings presentation

3. The chart below shows the revenue breakdown by business segment:

Source: Koufu 2018 first half earnings presentation

4. Despite higher revenue, profit after tax decreased by 1.4% from S$12.5 million a year ago to S$12.4 million. This was partly because of lower interest income due to the company’s restructuring exercise and a reduction in government grants.

5. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 8% in the first half of 2018 due to higher revenue and lower cost of inventories consumed, staff costs, and other operating expenses. Koufu’s EBITDA margin, therefore, improved by 1.1%.

6. Earnings per share was 2.56 Singapore cents for the first half of 2018.

7. Koufu maintained a healthy balance sheet with S$42.5 million in cash and just S$3 million in debt, giving it a net cash position of S$39.5 million. The company ended the quarter with a net asset value per share of 8.71 Singapore cents.

8. During the reporting period, Koufu generated S$11 million in cash flow from operations.

9. The company had raised funds through its IPO to prepare for its next phase of growth. Koufu is looking to expand in Singapore through new outlets in hospitals, commercial malls, tertiary education institutions, and new housing estates. It also hopes that the development of a new central kitchen will provide better support for its F&B outlets and improve productivity and operational efficiency.

10. At the time of writing, shares of Koufu exchanged hands at S$0.645 apiece. This translates to an annualised price-to-earnings ratio of 12.5 and a price-to-book ratio of 7.4.

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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 writer Jeremy Chia doesn’t own shares in any companies mentioned.