Super Group - 3rd sept 2016
SUPER REPORTS PATMI OF S$9.8M ON A REVENUE OF
S$115.0M FOR 2Q16
2Q16 EBITDA margin improved to 16.9% (2Q15: 16.4%), underlining the Group’s resilient
income generating capability
Strong operating cash flows and financial position with net cash increasing 21% to
S$116.5m (31 December 2015: S$96.6m)
Declares interim dividend of 1.0 SG cent (1H15:1.0 SG cent) per share
On a brighter note, we are glad that despite such headwinds and challenging market conditions, our
business remains profitable and cash generative. We posted higher BC sales in key markets of Thailand,
China, Singapore and the Philippines while FI registered sales growth in China and made in-roads into new
markets such as Europe and Middle East. Furthermore, the Group’s healthy financial position with net cash
of S$116.5m places us in a strong position to weather current headwinds. In the period under review, we
launched ESSENSOTM in Singapore, Malaysia and Thailand for our Branded Consumer (“BC”) business while
our Food Ingredients (“FI”) footprint diversified and expanded into new markets. The long term prospects of
the Group are stronger as we focus on executing our growth strategy of building brands and developing
innovative product amidst a very difficult operating environment.”
Despite the lower PATMI, EBITDA margin improved to 16.9% (2Q15:16.4%) demonstrating that the Group’s
income generating capability remained resilient.
Despite the lower profit achieved in the current quarter, net cash from operating activities grew 3% YoY to
S$19.5m while net cash balance jumped 21% to S$116.5m (31 December 2015: S$96.6m). The improvement
in operating cash flows reflects the Group’s cash generative business model. Consequently, the Group’s cash
and bank balances rose to S$144.3m (31 December 2015: S$123.9m) as at 30 June 2016.
Business Outlook:
To streamline the Group’s operations, management is consolidating the Group’s non-dairy creamer (“NDC”)
facilities (i.e. the Singapore plant and China Wuxi plant) to the China Wuxi NDC facility.
The consolidation
exercise, targeted for completion by the end of the current year, will enhance the Group’s NDC production
efficiency and lower operating costs.
In addition, Super FI (M) Sdn Bhd (a 100%-owned subsidiary) has been awarded the “Principal Hub” incentive
by the Malaysian authority. Super houses most of the key ingredients manufacturing capabilities and R&D
activities for Spray Dried Coffee, Freeze Dried Coffee and Botanical Herbal Extracts at the Group’s Malaysian
facility. This facility is now one of the largest instant coffee plant in Southeast Asia with an annual capacity of
about 20,000 metric tons. Under the Principal Hub scheme, income tax exemption is given for a period of 5
years with effect from FY2016. The incentive can be extended for another 5 years upon fulfilling certain
conditions. Super FI (M) Sdn Bhd started operations in 2Q16
http://infopub.sgx.com/FileOpen/Super%20Group%202QFY2016%20Earnings%20Press%20Release.ashx?App=Announcement&FileID=416761
From TA point of view:
Super after touching the low of 75 cents on 2nd Aug 2016 it had since managed to trend higher to touch 81.5 cents on 1st sept 2016.Couple with high volume of 6.26m share changing hands. This is quite positive.
Both Macd & Rsi are showing sign of a positive divergence which may likely provide further indication that the share price may continue to head higher.
Short term wise, I think it may likely move up to re-test 82 cent.
Breaking out of 82 cents with ease that may likely drive the share price higher towards 84.5 then 90 cents.
Company has No/Zero debts, Net Cash per share is about 13 cents, dividend of about 2.8%, ROI is about 9+%. Strong cash flow.
Stripping off the Net Cash per share of 13 cents from current share price of 78.5 cents that will give us a rough guide line of the share price value at 65.5 cents.
Estimate EPS is about 4.1 cents. I think current price is presenting a good value.
Another plus point to take note is that recent Share buy back by company and also one of the Major shareholder that may be a positive indication about the company.
(trade base on your own decision)
