Berjaya Food revenue to be boosted by KRR small-format store strategy


KUALA LUMPUR: Berjaya Food Bhd plans to open more Kenny Rogers Roasters (KKR) small-format stores in FY21 as it aims to capture changing consumer trends in view of the increasing popularity of the grab-and-go concept store, said AmInvestment Bank research.

Berjaya Food had previously planned to open three to five KRR small-format stores, but is now looking at opening up to 10 of such outlets.

"It is also a 'new norm' strategy that BFood is looking into as it believes that it is more viable to open small-format stores in the current environment that require less capex and operating cost compared to restaurants.

"We believe this will result in higher revenue of KRR by 11% from RM69mil in FY20 to RM76m in FY21F, contributing about 10% to BFood’s overall revenue in FY21F," said AmInvestment.

The research house has upgraded Berjaya Food Bhd's earnings forecasts on expectations of better sales growth from 1QFY21 onwards.

It expects improved demand from the easing of the movement control order although it thinks the group will continued to be negatively affected by the Covid-19 pandemic.

It raised earnings forecast 11%, 10% and 9% for FY21F, FY22F and FY23F respectively.

"We expect better sales growth mainly from KRR, which is expected to break even or even post a positive PAT for FY21F.

"BFood has closed down 14 underperforming KRR stores in FY20, which should help reduce costs," it said.

Meanwhile, Starbucks sales have improved with the easing restrictions since the recovery MCO while Jollibean's venture into other countries has been put on hold because of the pandemic.

AmInvestment upgraded Berjaya Food to a "hold" call from "sell" with a higher fair value of RM1.13 a share from 78 sen previously, based on a price-earnings of 17x on FY22 forecast earnings per share.
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 18
Cxense type: free
User access status: 3
   

Did you find this article insightful?

Yes
No

100% readers found this article insightful

Next In Business News

RHB posts FY20 net profit of RM2.03bil, proposes div of 7.65 sen/share
Maxis posts RM319m net profit in 4Q, RM1.38b in FY20
Alliance Bank posts Q3 net profit of RM100.46mil
TNB 4Q net profit jumps 85% to RM1.2bil; pays 58 sen in dividends
Bursa tracks global equities sell-off as surging bond yields trigger panic
Malaysia’s exports up 6.6% to nearly RM90b in January
KPS surpasses RM1bil revenue mark for fiscal year 2020
EPF launches world’s first and largest Shariah PE fund of RM2.43b
SCIB's earnings, revenue jumps significantly in FY20
Ringgit falls against demand for greenback

Stories You'll Enjoy


Vouchers