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Results First Take: FY21 net profit +56% y-o-y, above expectations

  • FY21 revenue recorded y-o-y increase of 13.2% to S$238.6m from S$210.8m in FY20
  • Gross profit margin up 6.0pp y-o-y to 32.8% in FY21
  • Net profit rose by 55.7% to S$39.3m in FY21 from S$25.2m in FY20 
  • Final dividend of $0.0084 per ordinary share and special dividend of $0.006 per ordinary share, bringing dividend payout ratio to 62.5% 
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Results Summary

FY20FY21y-o-y change
Revenue (S$m)210.8238.6+13.2%
     Outlet Management103.3112.5+8.8%
     Food Retail104.4119.4+14.4%
     Outlet Investment3.16.8+121.3%
Net profit (S$m)25.239.3+55.7%
Basic EPS (Scts)2.23.3+51.4%

Solid FY21 performance

  • Revenue growth came from all 3 business segments:
    • Outlet Management: 3 new coffeeshops and improvement in footfall at coffeeshops
    • Food Retail: higher revenue contribution from existing food stalls, increase in food delivery sales, 6 new food stalls and 1 new confectionery shop
    • Outlet Investment: sale of beverages and tobacco products, rental income and provision of cleaning and utilities services from food outlet properties acquired in 2H20
  • Gross profit margin increased to 32.8% in FY21 from 26.8% in FY20
    • Government grants for wages support of S$12.2m in FY21 vs S$6.5m in FY20 
    • Rental rebates passed down by landlords of S$3.6m in FY21 vs S$5.3m in FY20
  • FY21 net profit of S$39.3m came in 11.3% above expectation of S$35.3m 
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Our view

  • Kimly delivered firm growth in FY21 as the work-from-home trend was a positive for footfall and delivery, which we expect to continue well into FY22
  • Strong balance sheet with S$95m cash possible to finance more acquisitions for inorganic growth
  • Latest acquisition of 75% stake in Tenderfresh to begin its earnings contribution in FY22, further boosting Food Retail earnings
  • Manpower shortage challenge persists but likely to ease gradually with the reopening of borders 
  • Valuations remain undemanding at 12.4x FY22F P/E, which is c.0.5 SD below its five-year average 

We maintain BUY, with an unrevised target price of S$0.50.