JAPANESE restaurant group RE&S Holdings has filed a preliminary prospectus for a Catalist listing as it seeks to raise capital for new outlets - in a move that will add to Singapore Exchange's (SGX) US$100 billion consumer sector, one of its focus sectors.
The listing of RE&S - which owns 20 restaurants here including Ichiban Boshi, Kuishin Bo and Kuriya Dining - is expected to take place by end-2017.
Proceeds from the deal will be used to open new food and beverage (F&B) outlets in Singapore and Malaysia; refurbish and improve production processes at its existing F&B outlets; and for business expansion through acquisitions, joint ventures and strategic alliances.
Revenue has been rising in the last two years, due mainly to an increase in revenue from the company's quick-service restaurants, convenience and others segment. In the year ended June 30, 2017 (FY2017), revenue was S$140.9 million, up from S$135.3 million in FY2016 and S$131.9 million in FY2015.
Net profit in FY17 was S$5.7 million, almost double the S$2.9 million registered a year earlier. In FY15, net profit came up to S$5.8 million.
The company intends to recommend and distribute dividends of at least 35 per cent of its net profits attributable to shareholders in FY2018 and FY2019 - to reward shareholders for participating in its growth.
This is despite the company not having a fixed dividend policy. RE&S said: "The form, frequency and amount of future dividends on our shares will depend on our earnings, general business and financial conditions ... and other factors which our directors may deem appropriate."
Key risks cited by the company include intense competition in the F&B industry, regulations that are subject to change, and uncertain lease terms.
Controlling ownership of the company currently resides with executive director and president Hiroshi Tatara, who holds a 73 per cent stake, and executive director and chief executive Yek Hong Kiat, who holds a 25 per cent stake.
Heliconia Capital Management, a small-and-medium enterprise investor and unit of Singapore government-owned investment firm Temasek Holdings, will be a cornerstone investor of RE&S in the initial public offering - for which DBS is the sponsor and issue manager.
Upon listing, RE&S will join 10 other companies that have listed on Catalist this year, among them Malaysian property developer Aspen Group Holdings and homegrown e-commerce company Y Ventures Group.
SGX said: "The listing will add to our consumer sector, which is one of SGX's focus sectors." The SGX consumer cluster currently comprises 150 companies with a combined market capitalisation of US$110 billion, and includes agri-commodities, F&B and retail companies.