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BreakTalk Group’s Latest Earnings: Revenue Rises

BreadTalk Group Limited (SGX: CTN) needs no introduction, with popular brands such as BreadTalk, ToastBox and Din Tai Fung, to name but a few, having a presence in many of the malls in Singapore. BreadTalk reported its first-quarter earnings for 2019 on Monday, 6 May.

Let’s have a quick look to see how it did.

Financial highlights 

Here are some of the key financial highlights from its latest first quarter results:

1) Revenue grew 6.1% year-on-year to S$157.6 million. This was on the back of growth seen across all segments and due to improvements in overall efficiencies in the central kitchen and procurement efforts.

2) Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) for the Group increased 188.9% year-on-year to S$47.2 million. This was due to the reclassification of lease-related expenses from operating expenses to depreciation and interest expenses.

3) Profit after tax consequently improved by 11.5% to S$1.2 million.

4) Earnings per share followed suit, increasing from 0.21 cents to 0.23 cents, up 9.5%.

5) As of 31 March 2019, BreadTalk’s balance sheet had S$151.2 million in cash and bank balances, and S$213 million in total debt. This translates to a net debt position of S$62 million. This was slightly higher sequentially (Q4 FY18) when net debt stood at S$41 million.

6) Operating cash flow for the quarter improved 175%, from S$6.2 million a year ago to S$17.07 million. Capital expenditure, on the other hand, increased 59.6% from S$6.45 million to S$10.3 million. This resulted in BreadTalk’s free cash flow seeing an improvement from negative S$0.25 million to S$6.77 million.

Outlook for BreadTalk

Mr. Henry Chu, the Group CEO, commented:

“2018 was a year of milestones for us. We expanded into new markets such as London with Din Tai Fung and brought our joint-venture partners Song Fa Holdings and Wu Pao Chun Food Ltd into strategic markets such as China and Singapore respectively. With the new partnerships, we laid the foundations to diversify our business portfolio so as to achieve sustainable growth for the Group.

In addition, we embarked on efforts to increase our central kitchen production facilities in China and Thailand. The 6.1% increase in group revenue show that these efforts are starting to pay off. Looking forward, we will continue to strengthen our presence of existing brands in key markets. We will continue to develop in talent development and the setup of our third regional office in Bangkok as we position ourselves for growth in Thailand and greater Mekong-region markets.”

BreadTalk’s closing price on Monday was S$0.84 per share, resulting in a price-to-earnings ratio of 30.97 and a dividend yield of 1.8%.

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Motley Fool Contributor Esjay contributed to this article. Esjay does not own shares in any of the above-mentioned companies.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Tim Phillips doesn’t own shares in any companies mentioned.