BreadTalk net profit up 82.5% for Q4; Group takes over of its Thailand operations with 160-million-baht buyout

Food and beverage firm BreadTalk Group posted a net profit of S$8.9 million for the fourth quarter, an 82.5% gain compared to a restated net profit of S$4.9 million a year ago, as higher other income and lower distribution and selling expenses offset the rise in administrative costs.

Revenue rose by 3.1% to S$154.8 million for the fourth quarter. For the full financial year, revenue was up by 1.7% to S$609.8 million.

Earnings per share (EPS) for the quarter was at 1.58 Singapore cents, compared with 0.86 Singapore cent a year ago. For the full-year, EPS was at 2.70 Singapore cents, compared with the 3.85 Singapore cents in the previous year.

The group has declared a total dividend of 8.4 Singapore cents for the year. The dividend for the previous year was at 19.6 Singapore cents.

2018 sales driven by restaurant, Food Atrium, and 4orth food concepts

For the full-year of 2018, the group said it had remained focused on its strategy of growing its portfolio of brands while consolidating existing brands’ performance in key markets.

BreadTalk said sales for the full-year was driven by growth from the Food Atrium and restaurant divisions as well as contributions from the 4orth Division, a segment that comprises five Sō Ramen, one TaiGai and one Nayuki outlets in Singapore, four Song Fa Bak Kut Teh and one Wu Pao Chun Bakery outlets in China.

For the full-year, net profit sank 29.9% to S$15.2 million, due to the absence of capital gains from the divestment of the group's investment in TripleOne Somerset in the financial year of 2017. The group’s joint ventures and associates also reported weaker results for the financial year of 2018, BreadTalk said.

Revenue in the group’s bakery division fell by 5.1% to S$282 million for the financial year of 2018, due to lower sales from direct operated stores in Shanghai, Beijing and Hong Kong, as well as lower franchise revenue from China.

An aggressive stance for 2019 with all hands on deck

BreadTalk said it is mindful of the headwinds faced in its bakery business.

‘Starting financial year 2019, we adopted a more aggressive stance to turn around the business and it will be all hands on deck for the team, with the group chief executive officer personally leading the efforts,' said the group.

‘Our centralised procurement efforts have been gaining notable traction in delivering cost savings. Lastly, greater efforts have also been placed in research and development to create a stronger pipeline of products that will help drive revenue,’ it added.

BreadTalk buys out joint venture partner in Thailand for ฿160 million

On Wednesday, the food and beverage chain operator said it has bought out its partner in a joint venture in Thailand. The group bought in on the remaining 50% interest in the company that it does not own from The Minor Food Group for ฿160 million.

The partnership was set up in 2014, with the ambition to further develop the BreadTalk brand in Thailand.

Shares of BreadTalk rose 0.57% or 0.5 Singapore cent to S$0.88 by mid-morning on Wednesday.