Coffee shop operator Kimly suspends trading

Kimly, the first operator of traditional coffee shops to be listed in Singapore, operates a chain of nearly 70 food outlets and 130 food stalls under various brands islandwide.
Kimly, the first operator of traditional coffee shops to be listed in Singapore, operates a chain of nearly 70 food outlets and 130 food stalls under various brands islandwide.PHOTO: LIANHE ZAOBAO

It seeks trading suspension pending updates to shareholders on information sought by regulators and a recent acquisition

The first operator of traditional coffee shops to be listed in Singapore, Kimly Limited, has asked for the trading of its shares to be suspended pending several updates to its shareholders.

These involve orders it has received to provide "certain information and documents" to regulators, updates on a recent acquisition it made as well as the group's unaudited full-year results that ended Sept 30, it said in a filing to the Singapore Exchange (SGX) yesterday.

Kimly's full-year results have yet to be released. It did not specify the nature of information it was asked to provide under regulatory orders, and did not reply to media queries.

While the coffee shop operator did not say which acquisition it was referring to, its most recent one announced in July was of drinks manufacturer Asian Story Corporation (ASC), which it acquired for $16 million in cash.

The Asian Story brand, said to have a 7.7 per cent market share locally, includes drinks such as chrysanthemum tea, winter melon tea and lemon barley.

ASC was profitable for the financial year that ended Dec 31 last year, and the three-month period that ended March 31 this year, said Kimly in a filing earlier this year.

Some analysts believe Kimly is unlikely to be in trouble given that its financials have been clear.

Speaking to The Straits Times, an analyst with a foreign bank who declined to be named said a more likely reason for the company's latest request to stop the trading of its shares could be disclosure gaps. He pointed to the acquisition of Asian Story as a possible cause for this.

While the coffee shop operator did not say which acquisition it was referring to, its most recent one announced in July was of drinks manufacturer Asian Story Corporation, which it acquired for $16 million in cash.

In another earlier SGX filing, Kimly reported revenue growth of 4.2 per cent to $49.9 million, and a dip in its net attributable profit of 4.8 per cent to $5 million for the third quarter ended June 30.

The boost was mainly from higher contributions by its outlet management division, of $800,000, and food retail division, of $1.2 million, said Kimly.

Since it opened trading in March last year at 55 cents - 120 per cent above its initial public offering price of 25 cents - Kimly has acquired other assets besides ASC.

It announced in June last year that it was buying a coffee shop and an industrial canteen.

 
 

It paid $850,001 to manage and operate Yong Yun coffee shop in Bedok Reservoir Road, the drinks stall on the premises, as well as the coffee shop leases through Yong Yun. The industrial canteen in Woodlands was acquired for $650,001. Unlike in the case of ASC, these payments were made mainly through the issuance of new shares.

 

Kimly operates a chain of nearly 70 food outlets and 130 food stalls under various brands islandwide.

Its shares last traded at 28 cents before the company called for a trading halt on Nov 22, pending the release of an announcement.

A version of this article appeared in the print edition of The Straits Times on November 28, 2018, with the headline 'Coffee shop operator Kimly halts trading'. Print Edition | Subscribe