BreadTalk Group posted a 22.2 per cent increase in third-quarter earnings to $4 million on lower expenses.
Revenue at BreadTalk, whose brands include Toast Box, Food Republic and Din Tai Fung, dipped 2 per cent to $154.3 million for the three months to Sept 30.
But the bottom line was boosted by a 7.1 per cent decrease in distribution and selling expenses for the quarter to $59.3 million from $63.8 million in the year-ago quarter.
Earnings per share rose to 1.41 cents from 1.16 cents previously while net asset value per share firmed to 56.7 cents compared with 54 cents as at Dec 31. Group revenue for the first nine months declined 2.6 per cent year on year to $449.5 million. But net profit surged to 139.5 per cent to $16.8 million from $7 million a year ago on lower cost of sales and expenses.
The company said that excluding one-off items, core food and beverage business net profit for the nine months would have been $12.1 million, up from $2.4 million in the year-ago period.
During the nine-month period, the mainboard-listed company ended franchise agreements of some underperforming franchisees in China as part of its efforts to evaluate and streamline its bakery segment, the largest revenue contributor to the group. It said it is also reviewing brand positioning and menu offerings.
BreadTalk's direct-operated stores remained relatively unchanged at 255, but there was an increase of 15 franchise outlets year on year to 604, the company said.
AT A GLANCE
REVENUE: $154.3 million (-2%)
NET PROFIT: $4 million (+22.2%)
INTERIM DIVIDEND: One cent a share (none previously)
Looking ahead, BreadTalk said it will continue to consolidate or exit underperforming businesses while expanding in profitable segments and markets.
Its first Song Fa Bak Kut Teh outlet in Shanghai and first Din Tai Fung outlet in Britain are expected to open next year, which will generate new revenue streams, it said.
The board has recommended an interim dividend of one cent per share for the quarter, compared with none for the year-ago period. This will be paid to shareholders on Dec 21.
BreadTalk shares yesterday eased one cent to $1.605.