Breadtalk

[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!