Latest Financial Information

2Q 2017

Financial Statements And Related Annoucement

Review of Performance


(A) Statement of Comprehensive Income

Group revenue for 1H FY2017 declined 3.0% Y/Y from $304.3 million to $295.2 million. For the same period, Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA") for the Group rose 16.1% Y/Y to $44.6 million with EBITDA margin improving to 15.1% (1H FY2016: 12.6%). Profit After Tax and Minority Interests ("PATMI") for 1H FY2017 improved 241.4% from $3.8 million to $12.8 million. PATMI margin rose to 4.3% (1H FY2016: 1.2%).

1QFY2017 saw the recognition of $9.3 million in net capital gain from the divestment of the Group's investment in TripleOne Somerset, while 1QFY2016 saw the recognition of S$8.8 million in net capital gain from the divestment of 112 Katong Mall. Excluding one-off items, core Food & Beverage (F&B) business net profit for 1H FY2017 would have been $7.1 million, a turnaround from a loss of $2.4 million in 1H FY2016.

Revenue declined 3.2% Y/Y to $145.9 million during 1H FY2017 at the Bakery Division. The decline was primarily due to weaker direct operated stores performance at Shanghai and Beijing. Direct operated stores remained relatively unchanged at 259 while franchise outlets saw a net increase of 12 Y/Y to 597. During 1H FY2017, we terminated the franchise agreements of some underperforming franchisees in China, which largely explained the decline in franchise outlets YTD. EBITDA for the Division declined 12.6% Y/Y to $12.1 million, with EBITDA margin at 8.3% (1H FY2016: 9.2%) on higher raw materials cost and weaker revenue at the Shanghai and Beijing direct operated stores.

For the Food Atrium Division, Revenue declined 8.1% to $73.7 million as number of outlets decreased by 5 Y/Y, primarily due to the closure of underperforming outlets in China. Following the consolidation of operations, the remaining China food atrium portfolio displayed strong recovery. As a result, EBITDA for the Division rebounded strongly by 363.1% to $10.8 million with EBITDA margin improving from 2.9% to 14.6%.

Restaurant Division revenue continued to improve at a steady pace of 3.0% Y/Y to $75.7 million. EBITDA improved 5.7% Y/Y to $14.7 million, with EBITDA margin rising from 18.9% to 19.4%. Outlet count was reduced by 1 Y/Y following the closure of RamenPlay at JEM in May 2017. We have already converted two RamenPlay outlets to Sō - Nex Serangoon and BreadTalk IHQ. The revenue performance of the two Sō outlets, following their openings, have been significantly higher than the original RamenPlay brand on the same sites.

Interest income rose 77.6% to $0.7 million on higher coupon return on investment securities, while interest expense was reduced significantly Y/Y by 18% to $2.5 million, despite a higher interest rate environment as total borrowings reduced by $20.3 million Y/Y to $161.7 million.

Earnings per share (EPS) on a fully diluted basis were 4.55 cents for 1H FY2017 compared to 1.33 cents for 1H FY2016.

Net asset value (NAV) per share was 55.4 cents as at 30 June 2017 compared to 54.0 cents as at 31 December 2016.

Number of outlets including franchise under the Group:

(B) Balance Sheet

As at 30 June 2017,

Non-current assets declined by $9.7 million or 3.0% from $322.4 million to $312.7 million mainly due to decease in property, plant and equipment by $13.3 million, due to depreciation;

offset by an increase in:

  1. other receivables by $1.7 million;
  2. investment in joint ventures by $1.5 million; and
  3. investment in associates by $1.0 million.

Current assets decreased by $14.4 million or 6.8% from $211.5 million to $197.1 million mainly due to decrease in:

  1. investment securities by $17.2 million following the divestment of TripleOne Somerset; and
  2. trade and other receivables by $5.8 million with improved collection;

offset by an increase in:

  1. cash and cash equivalents by $7.5 million; and
  2. prepayments by $1.5 million.

Current liabilities decreased by $9.7 million or 4.4% from $215.8 million to $206.2 million mainly due to decrease in:

  1. trade and other payables by $5.9 million; and
  2. short term loans and current portion of long term loans by $4.2 million.

Non-current liabilities decreased by $18.4 million or 11.1% from $166.1 million to $147.7 million mainly due to decrease in:

  1. long term loans by $16.1 million; and
  2. other liabilities by $2.2 million.

(C) Cash Flow Statement

The Group generated net cash flow from operating activities of $31.9 million in 1H FY2017, an improvement of $3.6 million from the $28.3 million generated in 1H FY2016, a testimony to the underlying strength of the core business.

Net cash flow generated from investing activities was $11.1 million in 1H FY2017, boosted by the $26.5 million proceeds from divestment of TripleOne Somerset. Excluding this, net cash flow was used primarily in the purchase of property, plant and equipment amounting to $15.9 million.

The Group continues its effort to pare down its debt. In 1H FY2017, there was a net repayment of $20.3 million of borrowings compared to the net borrowings of $0.5 million in 1H FY2016. During the period, the Group also paid out $11.3 million in dividends. As a result, net cash flow used in financing activities in 1H FY2017 was $34.1 million.

Overall, the Group generated a net increase in cash and cash equivalents of $8.9 million in 1H FY2017, ending the period with a cash and cash equivalents of $128.1 million.

(D) Segment Information

Geographical Information


  1. Bakery operations comprise operation of bakery retail outlets as well as that operated through franchising.
  2. The business segment "Others" comprises the corporate services, treasury functions, investment holding activities and dormant associated company.
  3. Non-current assets information presented above consist of property, plant and equipment, investment property and intangible assets.

Commentary On Current Year Prospects

Efforts continue to be underway this year to evaluate and streamline our Bakery Division franchise portfolio with the objective of delivering sustainable franchise income growth. Progress has been made in turning around any underperforming direct operated stores. We are also actively managing the procurement of our raw materials to diversify our sources and further improve our operating cost structure.

Vacancy rate at our Food Atrium Division has continued to stay at record low of under 3%. The team continues to finetune our tenant mix in each food atrium to maximum revenue generation potential of our assets. The profitability improvement seen at the Division remains encouraging, and is strong testimony to the fact that our strategies are effective.

Profitability at the Restaurant Division continues to improve, driven by Din Tai Fung in Singapore and Thailand, with the losses at RamenPlay narrowing significantly. We expect to complete the conversion of all remaining RamenPlay outlets to Sō by end of September 2017.

The Group stays its course in consolidating underperforming operations and expanding its outperformers. New outlet openings remain at a cautious pace, with the focus remaining on profitability and the quality of earnings for FY2017.