CATALIST-listed coffeeshop consolidator Kimly announced on Friday that its wholly-owned subsidiary Northstar has acquired a 25 per cent stake in a coffeeshop property in Yishun for a consideration of around S$6.06 million. 

 

The total consideration of the acquisition will be paid for entirely in cash from the internal resources of the group. 

 

Kimly said in its statement that the acquisition enables the group to " entrench its operating rights of the coffeeshop" . It will then be entitled to first rights of refusal in the event of lease renewal or sale of the property. This comes as the company observed that long-term leasehold coffeeshop properties have become increasingly scarce in recent years. 

 

In addition, the acquisition contributes to the group' s " ongoing endeavours to pursue long-term direct ownership in the properties where the food outlets operated and managed by the group are located" .

 

The coffeeshop acquired is located is on the ground floor of 925 Yishun Central 1     it has a 99-year leasehold title, which commenced on Sept 1, 1991.

 

Kimly said in a statement that the coffeeshop is in a prime location in a mature estate, within 300m of the Yishun integrated transport hub, Northpoint City and Yishun MRT station.

 

" The property enjoys high footfall, which is expected to grow in the near future due to upcoming residential developments in the vicinity," it said. 

CATALIST-listed coffeeshop consolidator Kimly has completed the acquisitions of six food outlets first announced on Feb 21 for S$35.5 million, and will soon acquire two coffeeshops for S$20.3 million.

 

Completion of the acquisitions of the two coffeeshops, which are in Block 380 Clementi Avenue 5 and Block 347 Ang Mo Kio Avenue 3, can only take place at a later date once the requisite approvals have been obtained from the Housing Development Board. These have been delayed due to the disruption caused by Covid-19, Kimly said in a filing on Wednesday.

 

Of the first payment of S$35.5 million, S$5.5 million has been satisfied through the issuance of 22 million new shares at S$0.25 per share, representing a premium of close to 15.9 per cent to the volume-weighted average price of S$0.2102 for Tuesday.

 

The 22 million new shares represent approximately 1.88 per cent of Kimly' s enlarged share capital. They will be listed on the Singapore Exchange from 9am on Friday.

 

As for the outstanding S$20.3 million to be paid for the remaining two coffeeshops, S$4.5 million of this will be satisfied through the issuance of 18 million new shares at S$0.25 per share at a later date.

 

Upon completion of the acquisitions, most of the properties will progressively undergo asset enhancements such as layout improvements they will also have enlarged seating capacities, and new food concepts will be introduced, Kimly said.

 

These improvements are aimed at retaining current food stall operators, attracting new ones, as well as serving customers better.

 

Kimly noted that the outbreak of Covid-19 has changed the landscape of the food and beverage industry, in that people are generally more cost-conscious as a result of the economic impact of the outbreak. 

 

" The group could benefit as consumers continue to prefer more economical food options in coffeeshops and also opt for more online food deliveries," it said.

CATALIST-LISTED coffee shop operator Kimly' s first-half net profit rose 5.3 per cent year on year to S$10.5 million for the six months to March 31, according to results on Monday. Revenue grew by 3.1 per cent to S$107.4 million on contributions from new coffee shops and stalls.

 

The board said it expects the group to stay in the black for the year. But it halved its proposed interim dividend to 0.28 Singapore cent a share, compared with the year prior. The books will close on July 3 and the dividend will be paid out by July 15.