Latest Financial Information

1Q 2017

Financial Statements And Related Annoucement

Review of Performance


(A) Statement of Comprehensive Income

Group revenue for 1Q FY2017 declined 4.5% Y/Y from $154.6 million to $147.6 million. For the same period, Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA") for the Group rose 31.3% Y/Y to $26.2 million with EBITDA margin improving to 17.8% (1Q FY2016: 12.9%). Profit After Tax and Minority Interests ("PATMI") for 1Q FY2017 improved 337.2% from $2.4 million to $10.7 million. PATMI margin rose to 7.2% (1Q FY2016: 1.6%).

1Q FY2017 saw the recognition of $9.3 million in net capital gain from the divestment of the Group's investment in TripleOne Somerset, while 1Q FY2016 saw the recognition of $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 1Q FY2017 would have been $3.1 million, a turnaround from a loss of $5.4 million in 1Q FY2016.

Revenue declined 3.0% Y/Y to $73.6 million during the quarter at the Bakery Division. The decline was primarily due to lower China franchise revenue contribution as the Division moved ahead with its plan to eliminate underperforming franchisees. Direct operated stores remained relatively unchanged at 261 while franchise outlets saw a net reduction of 8 Y/Y to 594. EBITDA margin normalised slightly from 8.9% to 8.0%, with EBITDA for the quarter at $5.9 million.

While revenue declined 13.1% Y/Y to $36.3 million on Y/Y lower outlet count, EBITDA for the Food Atrium Division recovered strongly by 417%, from $0.9 million to $4.9 million, helped by strong recovery across the entire China portfolio, elimination of profitability drag by underperforming outlets, as well as strong performance in Singapore. EBITDA margin for the quarter improved to 13.5% (1Q FY2016: 2.3%). Outlet count was unchanged during the quarter at 57.

Restaurant Division revenue growth momentum continued during the quarter, improving 2.3% Y/Y to $37.8 million, with incremental revenue contribution from 3 new outlets this year - Punggol Waterway Point, City Square Mall and Centrepoint. EBITDA improved 13.9% Y/Y to $7.4 million, with EBITDA margin rising from 17.7% to 19.7%. During the quarter, outlet count was unchanged at 32, although we converted one RamenPlay outlet at Nex Serangoon on 31 March 2017 to a new concept ramen store by the brand name "Sō".

Interest income rose 73.8% to $0.4 million on higher coupon return on investment securities, while interest expense was largely unchanged Y/Y at $1.4 million, despite a higher interest rate environment as total borrowings reduced by $30.8 million Y/Y to $166.8 million.

Earnings per share (EPS) on a fully diluted basis was 3.80 cents for 1Q FY2017 compared to 0.87 cents for 1Q FY2016.

Net asset value (NAV) per share was 58.1 cents as at 31 March 2017 compared to 54.0 cents as at 31 December 2016.

Number of outlets including franchise under the Group:

(B) Balance Sheet

As at 31 March 2017,

Non-current assets declined by $4.0 million or 1.2% from $322.4 million to $318.4 million mainly due to decrease in: property, plant and equipment by $6.7 million, due to depreciation;

offset by an increase in:

  1. investment in associates by $1.6 million; and
  2. other receivables by $1.7 million.

Current assets decreased by $9.2 million or 4.4% from $211.5 million to $202.3 million mainly due to decrease in:

  1. investment securities by $17.2 million following the divestment of investment in TripleOne Somerset;
  2. cash and cash equivalents by $11.4 million, mainly attributable to repayment of bank loans;

offset by an increase in:

  1. other receivables by $18.4 million, pending receipt of the balance proceeds from the divestment in TripleOne Somerset; and
  2. prepayments by $0.8 million.

Current liabilities decreased by $9.1 million or 4.2% from $215.8 million to $206.8 million mainly due to decrease in:

  1. trade and other payables by $9.5 million;
  2. short term loans and current portion of long term loans by $1.8 million;

offset by an increase in:

  1. provision for reinstatement cost by $1.6 million; and
  2. tax payable by $1.5 million.

Non-current liabilities decreased by $15.6 million or 9.4% from $166.1 million to $150.5 million mainly due to decrease in:

  1. long term loans by $13.5 million; and
  2. other non-current liabilities by $2.0 million.

(C) Cash Flow Statement

The Group generated net cash flow of $16.3 million from operating activities in 1Q FY2017, an improvement of $5.1 million from the $11.2 million generated in 1Q FY2016, a reflection of the strong cash generating ability of the underlying core business.

Net cash flow used in investing activities for 1Q FY2017 was $9.9 million compared to positive investing activities cash flow of $1.8 million for 1Q FY2016, mainly due to the receipt of divestment proceeds for 112 Katong in 1Q FY2016, whilst the balance proceeds from the divestment of TripleOne Somerset is expected to be received in 2Q FY2017.

The Group continues its effort to pare down its debt. For 1Q FY2017, there was a net repayment of $15.4 million of bank borrowings compared to a net repayment of $4.6 million in 1Q FY2016. The accelerated pace of loan repayment resulted in a net cash flow used in financing activities of $16.8 million for the quarter as compared to $6.0 million for 1Q FY2016.

Overall, the Group registered a net decrease in cash and cash equivalents of $10.3 million for the period ended 31 March FY2017, ending the period with a cash and cash equivalents of $109.2 million.

(D) Special Dividend

The Board is pleased to declare a special dividend of 2.0 cents per share ($5.6 million) following the divestment of TripleOne Somerset, a non-core real estate investment. The dividend represents approximately 60% of the divestment gain.

(D) Segment Information


Geographical Information


  1. Bakery operations comprise operation of bakery retail outlets as w ell 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

Consistent with earlier guidance, the Bakery Division will continue to evaluate its franchise portfolio during the year and look to work with better quality partners with the objective of delivering franchise income that has longer term growth potential. Efforts are also already underway to address underperforming direct operated stores across the portfolio.

Vacancy rate at our Food Atrium Division has hit a record low, following intense marketing efforts to fill up vacant stores and improve tenant mix and profile. The recovery in profitability seen at the Division during the quarter is encouraging, and is strong testimony to the fact that the business plans we put in place are sound.

Profitability at the Restaurant Division continues to improve, driven by Din Tai Fung in Singapore and Thailand, with the losses at RamenPlay narrowing significantly. Initial performance of our recently launched, new ramen concept - "Sō", appears encouraging, and we should be able to provide more update in the next quarter.

The Group has seen strong recovery in its core business supported by its commitment to slow down its pace of outlet expansion amidst a more cautious F&B / retail environment, streamline our operations and better control our costs. The focus shall remain on profitability and the quality of earnings in FY2017.