ST Group Food Industries plans Catalist IPO

Published Tue, Jun 11, 2019 · 11:24 AM

ST Group Food Industries, the Australian-headquartered franchisee for various food brands, has lodged a draft prospectus for a listing on the Catalist board of the Singapore Exchange.

The group owns exclusive franchise and licence rights to the PappaRich, NeNe Chicken, Hokkaido Baked Cheese Tart, Gong Cha, Ippudo and iDarts brands in various territories across Australia, New Zealand and Malaysia.

It also opened its first Gong Cha outlet in England this month.

The details of the fund raising have not yet been published. There is no public offer. The shares will be sold by way of a placement.

Two master franchisors will be coming on board as cornerstone investors.

The first is Chikaranomoto Global Holdings, owned by Tokyo-listed Chikaranomoto Holdings, which owns the Ippudo brand.

The second is Hyein Foods, the South Korean owner of the NeNe Chicken brand of Korean fried chicken quick service restaurant chains.

Proceeds from the share sales will be used to expand the group's franchise network, introduce new brands and concepts, expand its existing central kitchen and corporate office in Australia, and to set up a new central kitchen and corporate office in Malaysia.

For the half-year ended June 30, ST Group Food Industries made a net profit of A$1.9 million (S$1.8 million). Revenue was A$25 million, up 36.7 per cent from the same period a year earlier.

F&B retail sales through outlets owned and operated by the group accounted for 68 per cent of total revenue.

Sales of ingredients and supplies to sub-franchisees and sub-licensees made up 17.4 per cent of revenue, while franchise fees from sub-franchising and sub-licensing activities made up 13.9 per cent of total revenue.

The group made a net profit of A$2.7 million in 2018, on revenue of A$36.5 million, up 20.3 per cent from 2017, helped by the opening of its first Ippudo restaurants in Australia, and its first NeNe Chicken outlets in Malaysia.

ST Group Food Industries has also developed its own brand concepts.

Its Pafu kiosks serve fruit puff pastries in Australia, and its first Kurimu kiosk is slated to start serving cream choux pastries in July.

At the end of May, ST Group Food Industries owned and operated 38 food outlets, with another 63 outlets owned and operated by its sub-franchisees and sub-licensees.

Chairman and chief executive Saw Tatt Ghee made his first foray into the F&B industry in 2002, when he opened a kiosk which served bubble tea in the University of Melbourne, Australia.

The bubble tea business became profitable in less than two years, and Mr Saw sold it off.

ST Group Food Industries found its beginnings in 2011, when it entered into a joint venture with PappaRich Group to establish a network of PappaRich restaurants in Australia and New Zealand, and opened its first PappaRich outlet in Melbourne in 2012.

United Overseas Bank is the sponsor and placement agent.

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