Old Chang Kee

Old Chang Kee: The curry puff retailer cooked up a FY14 net profit of $6.0m (+2% y/y) on revenue of $68.9m (+5%) Top-line growth was led by a 5.9% increase in retail sales to $67.8m on contributions from new outlets as well as higher receipts from the existing outlets. Meanwhile, revenue from other services such as delivery and catering services dropped 31.9% to $1.1m after the group changed its delivery mode in Oct ‘12 to accept only bulk orders. Gross margin remained stable at 62.2% compared to 61.3% a year ago. Other income rose 13.6% to $1.1m, due to gains from disposal of motor vehicles and government wage credits in Mar ’14 but this was offset by an 8.6% rise in admin expenses to $10.1m, and a 42.6% rise in other expenses arising from doubtful debt provisions and lower FX gains. Going forward, management group expects operating leases, labour and raw material costs to remain high over the next 12 months. The group has proposed dividends of 1.5¢ per share for FY14 versus total payout of 6.5¢ (1.5¢ ordinary & 5¢ special) in FY13. At the current price. OCK trades at 19.7x FY14 P/E and 3.75x P/B.