Soup Restaurant Group

[Drizzt]

same as food junction.

[kelvesy]

It seems to be that the management has been aggressively buying up their shares since August this year. Rather intrigued by it.

The profitability of the business doesn't look that good as of first half of the year, and valuations appear to be slightly over for a F&B establishment?

Is there anything that we might missed on this company?

[mkmk]

For other's info, Soup Restaurant have listed their recent buybacks in the investors relations website.

They've passed the Share Purchase Mandate on 22nd July, with their main aims stated:
- Restore investors’ confidence and to protect existing shareholders
- Enhance their NTA, if shares are bought below NTA
- Facilitate the return of surplus cash reserves over and above the Group’s working capital requirements to the Shareholders
- Buffer short-term share price volatility and off-set the effects of short-term share price speculation


(Not vested)

[FatBoi]

I know what I missed out. A rally! Haa...

But it's quite a sight. It's been 2 months plus since the 1st share buyback on 7 Aug, mgmt has bought back 5.48 million shares, splashing out S$1 million in the process.

The weighted average share price for the buybacks is S$0.186.

Yes, half year results not stellar, higher rental expenses are weighing down on profitability, so are employee benefits. Balance sheet-wise still pretty, just cash levels alone (even after taking into account the sharebuybacks) can settle all liabilities. You don't see many of those nowadays.

Warren Buffett once said in his 1984 Letter to Shareholders that when companies with outstanding businesses and comfortable financial positions find their shares selling far below intrinsic value in the marketplace, no alternative action can benefit shareholders as surely as repurchases.

Is mgmt signalling the company is undervalued? The highest price they bought back at is S$0.225.

I am unsure of the part on outstanding business but Soup Restaurant's financial position is decent (even though some may argue that can change too!)

(used to be vested)