Last week BreadTalk Group Limited (SGX: CTN) announced it would open its wallet to shell out S$80 million for Food Junction. My colleague Royston described some of the salient points of the acquisition in an earlier article. In this article, I’ll take a deeper look at whether BreadTalk is overpaying for the food court operator.  Compared with previous transactions In 2013, Auric Group successfully privatised Food Junction (which was a listed company back then) by buying the remaining 39% stake in Food Junction that it did not already own. At that time Auric Group made an offer valuing Food Junction at S$30 million. In 2017, Lippo’s Riady family successfully privatised Auric Pacific Group, valuing the company at S$48.3 million. Auric Pacific Group, besides owning Food

On 2 September 2019, BreadTalk announced its acquisition of Food Junction for $80 million to become the third largest food court or coffeeshop player in Singapore with 26 outlets, behind NTUC Foodfare/Kopitiam (10+52 outlets) and Koufu (47 outlets). Currently, Food Junction has 12 food courts in Singapore and three in Malaysia, with an additional one expected to open in 2020 at The Mall, Mid Valley Southkey. Unlike BreadTalk’s Food Republic which targets the premium segment, Food Junction has more of a mass-market appeal with a 10 to 15 percent lower average ticket size. As such, management believes that the location of Food Junction food courts would fit into the existing portfolio of BreadTalk which will allow the group to cater to a different market segment and expand into non-traditi

These days, it is extremely tough being a food and beverage (F&B) vendor in Singapore due to increasing rental, labour and raw materials cost pressures. In this cut-throat environment, turnaround of stallholders are rife, resulting in lesser visibility and operational uncertainty.   Despite the highly competitive and challenging F&B environment, the operator and manager of food courts and coffee shops – Koufu Group (Koufu) reported a rather solid 1Q19 and had recently been receiving rather positive recommendations from the street.   Defensive Earnings  The top line grew at a compounded annual growth rate (CAGR) of four percent to $223.8 million in FY18. In 1Q19, revenue continued to increase 4.9 percent to $57.8 million, boosted by a 9.2 percent and 0.7 percent growth in

Koufu Group Limited (SGX: VL6), a food court and restaurant operator, is expanding beyond Singapore. Here are three reasons I believe the group can continue to grow.

Singaporeans are willing to spend hours queuing for food that is said to be good. It’s been 2 months since Shake Shack opened at Jewel and the hype has yet to die down as Singaporeans continue to stand in line for more than an hour to get their hands on the famous burgers. According to SingStat, the price of food has increased by close to 1.4% in 2018. This week, the STI ETF opened at $3.279 and closed at $3.373 on Friday. In this week’s edition of 4 Stocks This Week, we look at 4 companies that own some of the most popular restaurants in Singapore, many of which we frequently dine at. Read Also: Why Do We Pay More For A&W In Singapore At Jewel Changi (Compared To Overseas)? BreadTalk Group Limited (SGX: CTN) BreadTalk was listed on the SGX in 2003. BreadTalk has multiple well-know