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BreadTalk Group's Q1 net profit up by 11.5% as portfolio grows

MAINBOARD-LISTED food and beverage player BreadTalk Group on Monday posted higher first-quarter earnings, buoyed by growth across the board as the business expanded.

Net profit stood at S$1.32 million for the three months to March 31, up by 11.5 per cent year on year. Revenue rose by 6.1 per cent to S$157.6 million, which the group attributed in part to improved central kitchen and procurement efficiency.

BreadTalk chalked higher turnover in its bakery, food atrium, restaurant and other divisions.

Over the quarter, it bought out its partner in Thailand’s BreadTalk, reaped contributions from Din Tai Fung in London and CentralPlaza Pinklao in Bangkok and opened Song Fa Bak Kut Teh stores in Beijing and Bangkok, as well as sold off its loss-making Carl’s Jr business in China.

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BreadTalk said in its outlook statement that it expects organic growth, including a deeper food court footprint in markets such as mainland China, Hong Kong, Taiwan and Cambodia.

It plans to open more Din Tai Fung and Song Fa Bak Kut Teh outlets, possibly in new markets, while bakery turnaround plans “have intensified, and we have seen some positive outcomes”.

The acquisition of a strategic stake in Thailand-listed food packaging and manufacturing company NPPG (Thailand) “demonstrates our constant pursuit for under-valued assets whose businesses are synergistic to our core operations”, the group added.

BreadTalk chief executive Henry Chu also said in a statement: “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.”

Earnings per share stood at 0.23 Singapore cent, up from 0.21 Singapore cent previously, while net asset value was 26.7 Singapore cents, against 28.9 Singapore cents as at Dec 31, 2018.

No dividend was recommended, unchanged from the previous year.

BreadTalk has 962 outlets in its global portfolio, including stores under franchise.

Separately, non-executive director Paul Charles Kenny stepped down on Monday, which the company said in a bourse filing was “to focus on business and personal commitments”.

Mr Kenny, 70, had been in the role since March 1, 2016.

BreadTalk closed at S$0.835, down by one-and-a-half Singapore cents, or 1.77 per cent, before the results were released.