Wed November 28, 2018 – 5:50
BARLEY A week after Kimly Limited sought to stop trading in its shares pending an announcement, Singapore's largest traditional coffee shops closed voluntarily trading on Tuesday, including speculation about gaps in information.
The company, which runs and manages a network of food stores and food stalls across Singapore's heartland, said that the latest shutdown will be because there are issues to be notified to shareholders.
These are rules for providing certain information and documents, updates on a recently acquired and unchanged full-year earnings for the period ending 30 September.
Marketers suspect that these may be related to the company's director information when purchasing Asian Story Corporation (ASC), a manufacturer and seller of beverages in Asian flavors like chrysanthemums, winter melon, water chestnut and onions.
On July 2, Kimly completed the acquisition of ASC from Wang Chia Ye for cash of $ 16 million. The transaction gave Wang an "earn-out payment", depending on how much profit before tax the company makes this calendar year. If the pre-tax profit exceeds $ 2 million, he is entitled to a $ 8 million payout. If it is below $ 2 million, the payment will be taxed.
There has been curiosity about the relationship between ASC and the drinking group Pokka. Kimly's former non-executive and independent director Alain Ong (also known as Ong Eng Sing) was until recently Pokka International's former CEO. He resigned from his management in Kimly in January this year after the AGM.
Since the end of September, the Chinese media reported that he was tipped to join Kimly. Kimly refused to comment on "news or information from third party sources".
An analyst said, "I do not think there is any error in the Group's financial figures. Do not hope. I suspect there is an information gap in the purchase of Asian Story, probably with the director's interest."
The analyst added: "Asian Story is earnings development and will affect Kimly's FY18 results."
Kimly was founded in 1990 by his executive chairman, Lim Hee Liat, and several of his friends. He was listed in Catalan in Singapore Exchange Securities Trading on March 20, 2017. Of the 173.8 million new shares offered at 25 Singapore cents, 170 million were privately invested and released 3.8 million for public subscription.
Post-Inbound Public Offer (IPO), controlling shareholder Mr Lim owned 42.4 percent of Kimly; His brother Peter Lim owns 0.05 percent.
The company earmarked $ 33.4 million on IPO net proceeds to finance total estimated expenses for acquisitions, joint ventures, general expansion (including establishment of new food stores) and renovation of existing food stores.
IPO was sponsored by PrimePartner Corporate Finance. Contacted on suspension, Joseph Au at PrimePartners refused to comment.
Since its launch, popping against 55 Singapore cents, Kimly shares have slipped to float around 28 Singapore cents at the time of the suspension. At 28 Singapore cents, the shares were trading with a multiple of 14 times its estimated FY18 earnings.
Another analyst said the group has a proven record as a food supplier.
"Cash flow is positive. In combination with IPO funds, the balance sheet is quite rich."
For the third quarter ended June 30, Kimly reported a 4.8 percent decrease in net profit to MUSD 5, despite a 4.2 percent sales to S 49.9 million.
The Group's financial position was strong, with total cash and bank balances at S $ 84 million at the end of June 2018.