KUALA LUMPUR: Berjaya Food
Bhd’s (BFood) core net profit of RM19.3mil for the financial year ended April 2018 fell short of expectations, at 93% of CIMB Equities Research and 87% of Bloomberg consensus forecasts.
It said on Friday the earnings shortfall was mainly due to weaker-than-expected profit from Kenny Rogers Restaurants (KRR) Malaysia.
“Full-year earnings growth was supported by higher contribution from Starbucks as well as the removal of losses from KRR Indonesia in 2H18.
“We adjust our FY19-20 EPS estimates by +1 to -1.2% following the release of the full year results and introduce our FY21F numbers. Maintain Hold, with a slightly lower end-2018F target price of RM1.74,” it said.
CIMB Research believes the group’s core franchise, Starbucks Malaysia, will continue to sustain its earnings growth on the back of continued store openings (+25-30 stores per year) and by the progressive earnings recovery from KRR Malaysia as it hones its product offerings and offers lower meal prices to attract more consumers.
It said the uplift in consumer sentiment and spending from the removal of GST should also help boost the demand for its products.