Kimly Limited Financial Analysis: Net Profit Decline of 8.0%
Business Description
Kimly Limited is a Singapore-based company primarily engaged in investment holding, provision of management services, and the operation of food and beverage outlets. The company operates through three main segments: Outlet Management, Food Retail, and Outlet Investment. Kimly’s operations are geographically concentrated in Singapore, where it manages a network of coffee shops and restaurants.
Industry Position
Kimly Limited operates within the highly competitive food and beverage industry in Singapore. The company faces competition from other local and international F&B operators. Its market share is supported by its established presence in key locations and a diverse array of food offerings.
Revenue Streams and Competitive Advantage
Kimly’s revenue streams are derived from sales of food, beverages, and tobacco products, rental income from leased premises, and service fees for cleaning and utilities. The company’s competitive advantage lies in its strategic locations, diverse menu offerings, and strong brand presence in Singapore’s F&B market.
Financial Statement Analysis
Income Statement
For the financial year ended 30 September 2024, Kimly Limited reported a revenue increase of 1.8% to S\$319.4 million. However, the net profit declined by 8.0% to S\$36.1 million from the previous year. The earnings per share decreased to 2.67 cents from 2.94 cents, indicating a reduction in profitability [[2]].
Balance Sheet
The company’s total assets increased to S\$400.5 million, with a significant rise in non-current assets due to new leases and equipment acquisitions. However, total liabilities also increased, leading to a net asset value per share of 14.76 cents [[3]].
Cash Flow Statement
Kimly generated S\$87.7 million from operating activities, offset by S\$74.0 million used in financing activities and S\$4.3 million in investing activities. The company maintained a healthy cash position with S\$98.5 million in cash and cash equivalents at the end of the year [[4]].
Dividend Information
The company declared a final dividend of 1.00 Singapore cent per share for FY2024, with a total dividend payout of 2.00 Singapore cents per share for the year [[25]].
Key Findings
Strengths: Kimly Limited has a solid revenue base with strategic expansion in food outlets. The company’s cash flow from operations remains strong, supporting its dividend payouts.
Risks: The decline in net profit and increased liabilities pose financial risks. The competitive F&B environment and rising operational costs could pressure margins further.
Special Activities
The company is expanding its market presence by opening new food outlets and acquiring strategic properties. This includes a recent acquisition at Block 204 Serangoon Central, which aligns with its growth strategy [[25]].
Investment Recommendations
For Current Stockholders
Given the company’s stable cash flows and dividend payouts, it is advisable to hold the stock. However, investors should be cautious of the declining profit trend and monitor any industry developments that may impact future performance.
For Prospective Investors
Potential investors may consider purchasing the stock due to its strategic expansion and solid market presence. However, they should be mindful of the competitive pressures and financial risks highlighted in the report.
Disclaimer
This is not financial advice. Investors should conduct their own research or consult with a financial advisor before making investment decisions.
Report Date
The analysis is based on the financial report for the full year ended 30 September 2024, published on 26 November 2024.
