BreadTalk Group’s 2Q17 results were generally within expectations. Revenue was down 1.5% YoY to S$147.6m due to a slightly mixed performance across the three F&B segments, while PATMI was up 62% to S$2.1m. Notably, core F&B net profit continued to improve and was up 35.1% to S$4.0m for the quarter.

1H17 revenue of S$295.2m constituted 47% of full year estimates. 1H PATMI including the S$8.6m divestment gain recognized in 1Q17 came up to a total of S$12.8m, forming ~63% of our full year estimates. Excluding the one-off gain, we estimate PATMI to form ~40% of our full year estimates.

Separately, an interim dividend of 1.0 S-cents was also declared, vs. 0.5 S-cents last year. Pending an analyst briefing, we have a HOLD rating while our fair value is under review.

Source: OCBC Research - 3 Aug 2017