BERJAYA Food Bhd (BFood) is likely to remain a star performer among listed companies in the Berjaya group stable judging from another stellar performance by the group’s food & beverage (F&B) for its FY6/2021.
BFood’s FY6/2021 earnings exceeded expectations on a successful business rationalisation and cost-optimisation efforts as well as robust sales driven by alternative channels, according to RHB Research.
This has prompted the research house to maintain its “buy” rating on BFood with a new DCF (discounted cash flow)-derived target price of RM2.40 (from RM2.33 previously).
“We continue to like BFood for its unique positioning as a prime beneficiary of a pick-up in foot traffic and expansion plans in FY6/2022 while also demonstrating earnings resiliency in the face of on/off lockdowns,” analyst Soong Wei Siang pointed out in a results review.
BFood’s 4QFY21 net profit of RM14.3 mil (+22.9% quarter-on-quarter) brought its FY6/2021 figure to RM47.4 mil (a turnaround from FY6/2020’s RM18.9 mil net loss), hence is above expectations at 107%-112% of RHB Research and consensus’ full-year forecast.
Moving forward, RHB Research expects BFood to benefit from a foot traffic return with mass vaccination reaching a critical mass given the company is a strong F&B player known for its solid brand equity and large store network.
“We expect contributions from dine-ins to play catch up and add to the heightened drive-through and delivery base,” projected the research house. “As it is, we understand deliveries and drive-throughs contributed to more than 60% of Starbucks’ FY6/2021 sales.”
The management is targeting to open 35-40 Starbucks outlets in FY6/2022 (1Q FY6/2022: six) which RHB Research believes can be met as Malaysia proceeds to the next phase of the National Recovery Plan (NRP).
Elsewhere, AmResearch also retained its “buy” call on BFood with a higher fair value of RM2.23/share (from RM2.16/share previously).
“The Starbucks segment in particular displayed resiliency and outperformed expectations despite net store closures in the last quarter,” observed the research house. “We believe that the improvements made to the Starbucks business model have positioned the group for stronger per outlet performances when footfall volumes start to recover.”
BFood has announced a fourth interim dividend of 1 sen/share, bringing the total to 3 sen/share for FY6/2021, implying a payout ratio of 22%.
At 10.36am, BFood was up 8 sen or 4.19% to RM1.99 with 214,500 shares traded, thus valuing the company at RM766 mil. – Aug 19, 2021
