Breadtalk

[greengiraffe]

http://infopub.sgx.com/Apps?A=COW_CorpAn...abd037bf5b

Interesting on mkt buyback...

[zerobeta]

a few observations:

1) only added 5 bakery stores in 1Q2014. In the first quarter of 2010, 2011, 2012 and 2013, they managed to add 13, 14, 18 and 18.
2) closed 8 restaurants in 1Q2014, last year in the first quarter they added 5 restaurants.

question is, could this be cost rationalization? closing down unprofitable stores?
but how then are they going to reach SGD 1 bln sales target by 2016?
or how are they going to justify >25x PE for that matter?
margin expansion? but core EBIT margin (which include only SG&A expenses) dropped from 1.6% to 0.5%!
0.5% !!! that's a very low margin and scary for a company with close to 100% debt to equity.


3) profits to minority interests dropped significantly by 70%, from 21% of profits to 7% of profits only. What happened? this helped the company to book rising EPS. If minority shares stayed the same, EPS would have dropped by 6%

4) out of the 6 properties they bought, have they utilized them according to their core business? i.e. using the space for their bakeries/ restaurants?

5) do you guys expect their centralized kitchen to help push margin up going forward? could this (including closing down stores) be the start of the company's margin turn-around story?


Thanks si fu!

[thor666]

It sounds like japan food holdings strategy. However, not all of break talk food business can be done with centralized kitchen.

Good business, overpriced and possibly over stretched in my opinion.

Not vested.


Sent from my iPad using Tapatalk

[yogi]

Typical hibrus mentality.
When company sets ambitious goal especially revenue but not RoI, Margins that leads them to start investing in non core business which is property in case of BT.

In my opinion, this is scary.

[Iosias]

BT owns food court business and a chain of other food franchise besides their bakery.

Do you know what is one of the major cost in retail industry? In every mjr shopping ctr, there are at least 4 types of BT business.

Food Republic at the top. Din Tai Fung midway, toast box & BT. Sometimes a ramen play, carls junior etc...

Imagine the rent they have to pay for some of those prime lots, esp those BT chain at the main entrance.

If they can co-develop the mall in exchange for the choice of prime location at discounted bulk prices, would you do it if you are management?

(vested)

[sg550319]

BT owns food court business and a chain of other food franchise besides their bakery.

Do you know what is one of the major cost in retail industry? In every mjr shopping ctr, there are at least 4 types of BT business.

Food Republic at the top. Din Tai Fung midway, toast box & BT. Sometimes a ramen play, carls junior etc...

Imagine the rent they have to pay for some of those prime lots, esp those BT chain at the main entrance.

If they can co-develop the mall in exchange for the choice of prime location at discounted bulk prices, would you do it if you are management?

(vested)

this is a key to success for a f&b business like BT. BT has taken up equity stake to ensure prime location or first right of refusal.

[greengiraffe]

Tough business...

http://infopub.sgx.com/FileOpen/BTG-1H14...eID=309299

[opmi]

Just one non-investment comment. Ramen Play food actually improved. Much better than the Japan Foods' Ramen Champions. That one really cannot make it.

[ksir]

I believe Breadtalk may still be a good and growing business. Especially if the streamlining of underperformed businesses go well. The question is: does it warrant such high valuation now?

[Iosias]

Hmm. I would agree with ksir. Streamline is a good thing.

Should remember to add/remove any one-off occurrences (profit or loss). Mr Market might correct price because of this 'scare'.

If it is consecutive quarters, it would be dangerous. However need to dig more and give attention to the segment & country not working out.

If intending to take position, should wait for Mr Market to give a better offer. PEG (price earnings to growth) is more than 1 currently.