COFFEE shop operator Kimly Limited reported a net profit of S$4.98 million attributable to owners of the company for the fourth quarter ended Sept 30, up from S$2.5 million a year ago.
This brings the full fiscal-year net profit to S$21.4 million, 76 per cent more than the preceding year.
But the surge was mainly technical, due to a restructuring exercise in shareholding structure when Kimly was listed on the Catalist board in March this year.
This resulted in S$2.5 million and S$12 million of net profit in Q4 2016 and fiscal 2016 respectively being attributable to non-controlling interests.
Assuming the restructuring exercise had been completed before fiscal 2016, there would be no profit attributable to non-controlling interest. Hence, net profit for the fourth quarter would have been 2 per cent lower year-on-year while net profit for the full year ended Sept 30 would have been 12 per cent lower than a year ago.
The group reported a 9.2 per cent growth in revenue for the fourth quarter to S$50 million and a 12 per cent growth to S$192.1 million for the full year.
Its full-year revenue growth was driven by broad-based growth in both business divisions - the outlet management division and the food retail division.
Kimly said it anticipates the F&B industry to remain challenging and will stay vigilant about controlling cost, lowering operating expenses and increasing productivity.
"We are aware of the intense competition and tight labour situation within the F&B industry and therefore we are adopting technology to improve work processes and maximise our manpower resources to boost productivity and operation efficiency," said Kimly's executive director Vincent Chia.
To that end, the group recently purchased an Enterprise Resource Planning (ERP) software system to manage the business by automating back office functions. Its implementation, potentially by the fourth quarter of fiscal 2018, is expected to lower operating costs in the long term.
The group has completed the construction of a four-storey annex and central kitchen at its corporate headquarters and is undertaking the final phase of upgrading works, which is expected to be completed in the third quarter of fiscal 2018.
Once the alteration works are completed and the new equipment is in place, the group will be able to perform more processes within the central kitchen and further reduce manpower reliance at the food retail outlets, Mr Chia said.
The board of directors has proposed a final dividend of 0.68 Singapore cent per share to be paid. Together with the interim dividend of 0.28 Singapore cent per share paid in June 2017, the total dividend declared in fiscal 2017 was 0.96 Singapore cent per share.
Shares of Kimly rose two Singapore cents or 5.7 per cent on Friday to close at 37 Singapore cents.