The Ambank call warrant expires on 2 June, still 3 weeks away. Usually the call warrant issuer does not suppress the mother share price so early, some more if BJFood quarterly result to be released in next 2 weeks is good, then the warrant issuer will be left with no more mother shares to sell in the last few days before expiry.
I suspect the quarterly result may be weak. Q3 ended March is seasonally weaker than Q2, furthermore BJFood earnings are pressured by higher material costs and higher labour costs. I hope it can maintain an EBITDA margin of around 30%.
But interest expenses will be lowered as BJFood pared down net debts by RM57.5 million in 1H FY2023.
BJFood has opened 17 new Starbucks stores and 2 new Kenny Rogers stores in 1H FY2023, on track for a total new opening of 35 Starbucks stores and 5 Kenny Rogers stores in FY2023.
BJFood has incurred capex of RM34.3 million in 1H FY2023, so it may incur another capex of some RM38 million in 2H FY2023 if it does open another 18 new Starbucks and 3 new KR stores as planned.
So total capex for FY2023 may come to RM72 million, a lot lower than estimates of RM80m - RM108m by analysts.
BJFood operating cashflows were strong at RM106.2 million in 1H FY2023, annualised to RM212.4 million. Minus off anticipated capex of RM72.2 million, BJFood will have free cashflows of RM140.2 million or 7.2 sen per share.
This can easily support a total dividend payout of 5.0 sen, yielding 6.1% at current share price. BJFood will still have some RM42 million to pare down debts after paying out 5.0 sen dividend in FY2023.
The recent share price drop of Bjfood, is due Ambank call-warrant B expires on 10/05. Not Ambank call warrant C which expires on 2 June. As a result, the call warrant issuer only give 4sen premium to CB holder, as compare to price of 92 sen before suppress the mother share price at one week ago.
Surprising that today Q3 report is not out. Which means another day of shopping on Bjfood will be happened on Monday. The pull down effect of Bjfood on last two days were very good opportunity for fundamental investors to pick up Bjfood shares at near 80sen range. Based on 2.5sen dividend given on last quarter and projected coming quarter shall give the same, 80sen share means 12.5% yield.
It is indeed a weak set of results for Q3 FY2023 that has caused insiders to have sold down BJFood in past few weeks from over RM1.00 to now RM0.825.
The Q3 quarterly result is no doubt disappointing but I feel that the share price drop over past few weeks has already reflected the weaker result. After all, the cumulative 9 months of FY2023 pretax profit is still 2% higher than 9M FY2022.
I am confident that the management will be able to adjust product pricing and control costs to bring back up the pretax margin in coming quarters.
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LaoHaidi
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Posted by LaoHaidi > 2023-04-13 14:46 | Report Abuse
suddenly shoot up today... because of the slowing of the US CPI I guess