Breadtalk

[brattzz]

agreed.

unless they are able to fanchise it successfully all over bigger markets, then they will be able to achieve a viable economical of scale operation.
Of cos, innovations and new products MUST be launched at regular intervals to excite the consumers!

:O

[yogi]

mrEngineer> The ability to pass cost to consumers should be seen with gross margins and not net margins. Net margins would factor in the non-operating costs which may be reduced as the company grows bigger and enjoy economies of scale (financing, administrative expenses etc.)

Yes, agree that GM % truely reflects the ability to pass the cost to consumer.

Looking at GM % trend from 2005 to 2010 of BT's overall business, its clear that company is able to pass the cost for overall business.

2005 2006 2007 2008 2009 2010
56% 55% 55% 54% 54% 55%

I was curious about what would be GM % trend for Bakery business. Following trend shows that bakery's business GM % interestingly increased from low inflation years to high inflation years.

year 2006 2007 2008 2009 2010
Revenue 63,000 79,000 111,000 129,000 158,000
Gross Prof 2,000 3,873 4,313 7,902 9,000
GP % 3.2% 4.9% 3.9% 6.1% 5.7%

Franch Incm 4120 8512

I wondered if above trend is due to faster growth in Franchise business as franchise business might be commanding higher margins as its input cost is very minumum (training, sales people etc). From information given in company's Annual Reports, it looks like its not possible to conclud that GP % increase is due to franchise business.

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karlmarx Wrote>the problem with marketing food as a novelty item, is that tastes change. people eventually tire of eating bread regardless of how unique it is; it is mostly dough, afterall. there was the donut craze. and the bubble tea craze (which is currently recessing for the second time). in the long run, staple food still outlast non-staples; people still don't expect to eat buns for meals

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In donut and bubble tea, there was not much innovation with wide range of varaties. Fundamental donuts are same but with just different toppings. Similar for bubble tea. Whereis in the case of BT's bakery business, though base ingredient is dough, its end products had wide varieties. If I remember correctly reading in its AR, company claims 100+ different varieties (pizza to indian Nan to floss...).

[Musicwhiz]

Business Times - 12 Nov 2011

BreadTalk Q3 profit jumps 31% to $3.67m

By VICTORIA HO

BreadTalk Group has registered a third-quarter net profit of $3.67 million, up 31 per cent from the corresponding quarter last year. The company, which operates bakeries and restaurants, recorded a nine-month net profit of $7.66 million, up 30.2 per cent.

Revenue for the third quarter ended Sept 30 increased 18.2 per cent to hit $96 million while revenue for the nine months climbed 20.9 per cent to $265.4 million. Q3 earnings per share (EPS) rose to 1.31 cents from one cent per share for the corresponding quarter last year.

BreadTalk's bakery business posted a 160.5 per cent spike in operating profit to $2.4 million for the third quarter, boosted by higher profit contributions from its Singapore and China outlets. It suffered smaller losses at its Malaysian outlets, and was affected by higher staff wages in Hong Kong as a result of the implementation of a minimum wage policy there.

Its profits from the bakeries were offset by lower profit from its restaurants and food courts, namely higher costs of some of its Din Tai Fung outlets in Singapore. Its food court business had to incur start-up costs for new outlets in Guangzhou, Thailand and Taiwan.

In the restaurant segment, BreadTalk owns and operates 11 Din Tai Fung, four Carl's Junior and 7 Ramen Play outlets as at Sept 30. BreadTalk also runs a total of 34 food courts across China, Hong Kong, Singapore and Malaysia.

Like last year, the board of directors did not declare a dividend for the quarter.

In the stock market yesterday, shares in BreadTalk closed at 53 cents, up half a cent.

[touzi]

I was in Chongqing, one of the 4 municipalities (直辖市）and a key hub in the western region, recently. Breadtalk has a branch in Jiefangbei (解放碑) the shopping hub of the city. It does not appeared to be doing well. I went past it at various times for a few days and I did not see the crowd that I saw in Breadtalk shops around Singapore. Maybe they do not have a mala (麻辣）bread.

[Contrarian]

Bro touzi, did u see the IFC building in Chongqing?

What is the impression of the city? is it bustling with business activities? Are there many businesses and offices there?

[Contrarian]

Bro touzi, did u see the IFC building in Chongqing?

What is the impression of the city? is it bustling with business activities? Are there many businesses and offices there?

[VIChris]

EPS of 2.71 cent YTD, A quick calculation on Cash Per Share Less Debt ($) 0.044
Friday closing price $0.53.

Attractive? Not for me.

[touzi]

Bro touzi, did u see the IFC building in Chongqing?

What is the impression of the city? is it bustling with business activities? Are there many businesses and offices there?

There are so many new sky scrapers, both finished and under construction, in the city that it is mind boggling. The densely packed buildings remind one of HK. I was impressed and yet at the same time the thought of overbuilding came to mind. Perhaps one of the reasons is that the city is extremely hilly and so whatever land they can build on, they will go as high as possible. There is some form of construction going on practically everywhere I went. I did not see IFC. I googled and found that it is in Jiangbei district. I spent most of my time in Yuzhong district. (Yuzhong and Jiangbei again remind me of HK Island and New Territory). I know a lot of major property developers are eyeing this city, including City Development. By the way, the metro stations have english announcement.


Watson and Carrefor appeared to be doing well. Many of the apparel shops you find in Singapore are there as well, but there aren't many shoppers. Once in a while, you see a hot babe walked in ( I did not check out the prices as I was too busy admiring the babe ).

I suspect the Sichuanese still has a parochial palate. While foreign restaurants like Japanese and Korean are crowded, I did see many non-sichuan chinese restaurant there, one exception is the famous Beijing Peking duck branch. The foreign restaurant probably has a novelty factor. By the way, Sichuan food is widely recognized as one of the four great Chinese cuisine.

The Breadtalk shop I saw was at a very prominent corner in prime shopping district. The crowd at Watson,Carrefor and foreign restaurants indicates that there is some spending power. I tend to think that the less than ideal crowd at Breadtalk is due to taste. If that is true, I am sure George Quek, being the shrewd businessman he is, will correct it.

All in all, Chongqing is a city in a hurry to catch up with the rest of other successful chinese cities like Shanghai ( which in my opinion has already caught up with Singapore ). Bo Xilai, the Party Secretary there is no ordinary man. I don't think there is ever a Chinese city that cracked down on vices as hard as he did. At the same time he is trying to reconnect the city to the rest of the world. A follower of the Deng Xiaoping one hand hard - one hand soft governing style.

My apologies to other readers if I have digressed too much from the main topic of this thread.

[RBM]

As an existing shareholder, I’m quite pleased with BreadTalk’s 2Q/1H 2012 results announced earlier this evening.

Summarising:

+ve: Q2 2012 revenues were up ~ 22% compared to Q2 2011. There appears to be growth, albeit of varying proportions, across all BreadTalk’s business segments.
+ve: NPAT and EPS up ~ 9% quarter-on-quarter.
++ve: Interim Dividend of S$ 0.005 per share declared – a modest but pleasing surprise. Particularly welcome since, before this, BreadTalk was trading on a ~ 1.8% dividend yield - my key gripe about the stock.
+ve: Restaurant segment did way better than the Bakery and Food Atrium segments.
+ve: The restaurant segment result was boosted by a really good performance from Din Tai Fung in both Singapore and Thailand.

-ve: ……….. but Ramen Play and Carl’s Junior in Mainland China QUOTE remained underperforming UNQUOTE.
-ve: The bakery business was adversely affected by higher manpower charges.
-ve: In the outlook commentary there is a rather sober mention of economic conditions in China becoming tougher and the impact this may have on BreadTalk's business.

Neutral: Performance in the Food Atrium segment was affected by refurbishment brought forward at some outlets – apparently this was aimed at securing more favorable lease renewal terms offered.
Neutral: Net asset value per share basically flat.

I sense that the centralisation of several BreadTalk operations is paying off. It is very clear that keeping costs under control is a key focus area for management and the results are encouraging.

Vested………….. but I’m still not keen on the taste of their bread products!

[Contrarian]

Got growth but no margin discipline...

As an existing shareholder, I’m quite pleased with BreadTalk’s 2Q/1H 2012 results announced earlier this evening.

Summarising:

+ve: Q2 2012 revenues were up ~ 22% compared to Q2 2011. There appears to be growth, albeit of varying proportions, across all BreadTalk’s business segments.
+ve: NPAT and EPS up ~ 9% quarter-on-quarter.
++ve: Interim Dividend of S$ 0.005 per share declared – a modest but pleasing surprise. Particularly welcome since, before this, BreadTalk was trading on a ~ 1.8% dividend yield - my key gripe about the stock.
+ve: Restaurant segment did way better than the Bakery and Food Atrium segments.
+ve: The restaurant segment result was boosted by a really good performance from Din Tai Fung in both Singapore and Thailand.

-ve: ……….. but Ramen Play and Carl’s Junior in Mainland China QUOTE remained underperforming UNQUOTE.
-ve: The bakery business was adversely affected by higher manpower charges.
-ve: In the outlook commentary there is a rather sober mention of economic conditions in China becoming tougher and the impact this may have on BreadTalk's business.

Neutral: Performance in the Food Atrium segment was affected by refurbishment brought forward at some outlets – apparently this was aimed at securing more favorable lease renewal terms offered.
Neutral: Net asset value per share basically flat.

I sense that the centralisation of several BreadTalk operations is paying off. It is very clear that keeping costs under control is a key focus area for management and the results are encouraging.

Vested………….. but I’m still not keen on the taste of their bread products!