Food Empire (SGX:F03) logged another record financial year with core NPAT surging 25.3% to US$56.5m while revenue rose 6.9% to US$425.7m in FY23, driven by stronger demand from markets like CIS, SEA and South Asia.
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Back-to-back record years and more to come
Food Empire's FY23 revenue grew steadily by 6.9% y-o-y to US$425.7m due to strong demand from its CIS, SEA and South Asia markets which grew y-o-y by 21.1%, 9.6% and 24.1%, respectively. Gross and net margins also improved to 33.2% from 29.8% a year ago and 13.3% from 11.3%.
Going forward, the non-dairy creamer expansion could potentially add US$20-40m of revenue in the next 1-2 years with a net margin of between 8-10%. In addition, demand from core markets remains strong which should drive revenue growth of 5-10% consistently y-o-y.
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Record dividend S$0.10 – 7% FY23 yield
Management declared a record dividend of S$0.10, made up of ordinary dividend of S$0.05 and a special dividend of S$0.05 per share, up 250% from S$0.04. See Food Empire's dividend dates.
We think that this level of dividends is sustainable if performance continues to improve as, even at S$0.10 per share, it represents a 70% NPAT pay-out ratio.
Food Empire has a strong net cash balance sheet and generates strong operating cash flow which makes the possibility of continuing to reward shareholders with more dividends more likely.
Share buybacks likely to continue
Read more at SGinvestors.io.
Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
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