OldTown’s 12MFY13 results were well within consensus and our estimates. Sales and earnings surged 16.7% and 46.1% y-o-y, mainly fuelled by stronger performance at its FMCG business. Gross margin widened due to stable raw material prices and a growing topline. We remain upbeat on the group’s outlook in view of its aggressive F&B outlet expansion and completion of its upcoming FMCG factory in Ipoh. Maintain BUY, with FV unchanged at RM2.60.
In line. Oldtown’s 12MFY13 revenue and core net profit (excluding a RM2m goodwill impairment incurred this quarter) expanded by 16.7% and 46.1% y-o-y respectively. The decent topline was buoyed by stronger showing from both the food and beverage (F&B) and fast moving consumer goods (FMCG) segments, which perked up by 12.7% and 23.2% y-o-y respectively. PBT at the FMCG advanced by 43.3% y-o-y, bolstered by better sales volume and higher average product selling prices, while that in its F&B segment eased marginally by 2.3%, largely due to a RM2m goodwill written off during the quarter. The top- and bottom-lines rose 5.9% and 7.3% respectively mainly owing to: i) higher sales from F&B outlets and collection of franchisees’ fees, and ii) better sales from FMCG (+2.9%).
Gross margin widens. The group’s gross margin rose to 31.9% vs 30% y-o-y amid stable commodity prices and robust sales. However, its EBIT margin weakened by 80ppts to 18.2% vs 19% y-o-y due to higher marketing and staff costs.
In expansion mode. As at end-2012, the group had a total of 220 F&B outlets, of which 197 were in Malaysia, 10 in Singapore, nine in Indonesia and four in China. It also plans to adorn its Singapore outlets with innovative deco, while adding more licensed outlets in Indonesia and China this year. We expect production capacity at Oldtown’s FMCG business to increase when its new factory in Ipoh is ready next month.
Maintain BUY. As the results were within estimates, we are leaving our forecasts unchanged for now. We like the group’s aggressive expansion as well as growth potential for its overseas business. Maintain BUY, RM2.60 FV, based on 15x FYE13 EPS.
In line. Oldtown’s 12MFY13 revenue and core net profit (excluding a RM2m goodwill impairment incurred this quarter) expanded by 16.7% and 46.1% y-o-y respectively. The decent topline was buoyed by stronger showing from both the food and beverage (F&B) and fast moving consumer goods (FMCG) segments, which perked up by 12.7% and 23.2% y-o-y respectively. PBT at the FMCG advanced by 43.3% y-o-y, bolstered by better sales volume and higher average product selling prices, while that in its F&B segment eased marginally by 2.3%, largely due to a RM2m goodwill written off during the quarter. The top- and bottom-lines rose 5.9% and 7.3% respectively mainly owing to: i) higher sales from F&B outlets and collection of franchisees’ fees, and ii) better sales from FMCG (+2.9%).
Gross margin widens. The group’s gross margin rose to 31.9% vs 30% y-o-y amid stable commodity prices and robust sales. However, its EBIT margin weakened by 80ppts to 18.2% vs 19% y-o-y due to higher marketing and staff costs.
In expansion mode. As at end-2012, the group had a total of 220 F&B outlets, of which 197 were in Malaysia, 10 in Singapore, nine in Indonesia and four in China. It also plans to adorn its Singapore outlets with innovative deco, while adding more licensed outlets in Indonesia and China this year. We expect production capacity at Oldtown’s FMCG business to increase when its new factory in Ipoh is ready next month.
Maintain BUY. As the results were within estimates, we are leaving our forecasts unchanged for now. We like the group’s aggressive expansion as well as growth potential for its overseas business. Maintain BUY, RM2.60 FV, based on 15x FYE13 EPS.
Source: OSK
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