Harimau Capital

KUCHING: Old Town Bhd (Old Town), is moving forward with its plans to tap overseas markets as it leverages on its steady performance growth and resilient consumer spending both locally and abroad, as shown in the latest financial figures.The group recorded revenue of RM83.02 million for the quarter ended September 30, 2012, increased by 14 per cent compared with RM72.97 million in the corresponding quarter in 2011.

Both cafe chain operation and beverage manufacturing segments had contributed to the increase of revenue, according to the company in a financial report released recently. Profit before tax (PBT) for the quarter was RM14.97 million, an increase of 20 per cent from RM12.48 million in the same quarter last year. The improved PBT was mainly due to the increase of revenue, it said.

The cafe chain operation recorded lower revenue of RM48.73 million, mainly due to the fasting month. The PBT for the quarter of RM8.17 million was lower than the profit before tax of RM9.34 million in the preceding quarter mainly due to the decrease of revenue. The revenue of RM34.29 million for the quarter ended September 30, 2012 for the manufacturing of beverages division saw a one per cent decrease as compared with RM34.69 million in the preceding quarter.

Despite the decrease in revenue, the PBT of RM6.75 million for the quarter was higher than the RM6.66 million in the preceding quarter. The higher profit was mainly a result of lower advertising and promotional costs as compared to the preceding quarter.Overall, the group reported a diluted earnings per share of 3.41 sen per share for the quarter and announced that the board of directors declared an interim dividend of six sen per share under the single tier system for the financial year ending March 31, 2013.

Commenting on its prospects for the cafe chain operation, the group said that as at September 30, 2012, it had a total of 210 café outlets, of which 191 are located in Malaysia, nine in Singapore, seven in Indonesia and three in China. “The group plans to open more outlets in the domestic front. For the international market, the group is well-positioned to open more outlets in Singapore, Indonesia and China. In Singapore, we are revamping its stores with a more innovative design concept.

“The group plans to open more licensed outlets in Indonesia this year. For the China market, there is a huge growth potential for Oldtown’s café chain business in view of its large population base and growing spending power, therefore, the group has an ambitious vision of opening more licensed outlets in strategic locations in China.”

With regards to development plans for the manufacturing of beverages, the group “is constructing a new factory in Ipoh which is expected to be completed by the end of the fourth quarter, a slight delay from the original planned completion date of third quarter this year.”

“Upon completion, the production capacity for beverages will increase to cater for expected increased demand from the export market. “The group aims to increase its market share in the existing export markets where the Group already has market presence such as Hong Kong, Taiwan, China and Singapore.

“The group foresees that there is much more room to grow for its beverages products in China in view of the country’s enormous market and other overseas market such as Thailand and Philippines. “Therefore, the group is seeking more potential distributors in different countries to improve its market shares and sales.“In the domestic market, we foresee growing demand as the group is actively participating in various joint marketing programmes organised by the local key retailers,” it stated.