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1 Company Paying Dividend on Wednesday

On Wednesday, 28 November 2018, Koufu Group Ltd (SGX: VL6) is going ex-dividend. What this means is that you need to own shares in the company before that date to receive its dividend.

As a quick background, Koufu is one of the largest operators and managers of food courts and coffee shops in Singapore. Its business consists of two business segments – outlet & mall management, and food and beverage (F&B) retail.

Koufu is paying S$0.01 per share for its 2018 third-quarter.

For the three months ended 30 September 2018, revenue rose 3.6% to S$57.6 million, up from S$55.6 million seen in the corresponding period a year ago. Both business segments saw higher contributions in the latest quarter due to an increase in the number of outlets, despite the partial closure of the Marina Bay Sands food court for refurbishment and upgrading works. The outlet & mall management segment saw revenue growth of 7% while the F&B retail segment posted revenue increase of 0.3%.

Koufu’s net profit, however, tumbled 34.5% to S$4.6 million on the back of higher operating costs. Excluding one-off initial public offering (IPO) expenses and finance income from convertible notes, net profit would have declined by a smaller amount of 13.2% to S$5.9 million.

The interim dividend payment of S$0.01 per share gives a payout ratio of 119.5% of Koufu’s net latest profit. The company said that the payout is line with its dividend recommendation made in the IPO prospectus of paying out at least 50% of net profit after tax generated in 2018 and 2019.

As for its outlook, Koufu commented that the F&B industry continues to be “highly competitive and challenging”. The company has a focus on increasing its market share in food courts and coffee shops, as well as expanding its F&B concept stores, bringing new food options and varieties to customers.

Koufu’s integrated facility is expected to commence construction in the fourth quarter of this year, and complete by the first half of 2020. The 20,000 square metres integrated facility in Woodlands Avenue 12 is more than five times bigger than its existing central kitchens and headquarters.

At the current share price of S$0.63, Koufu has a price-to-earnings ratio of around 13 and a dividend yield of 1.6%.

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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.