Neo Group Ltd *Official* (SGX: 5UJ)
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Shion
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Shion
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Neo Group takes 51% stake in How's Catering for up to $4.4m in cash and shares
Neo Group takes 51% stake in How's Catering for up to $4.4m in cash and shares
https://www.straitstimes.com/busine...group-takes-51-stake-in-hows-catering-for-44m
SINGAPORE - Catalist-listed food solutions provider Neo Group is acquiring a 51-per cent stake in privately held How's Catering for up to $4.4 million in cash and shares, it announced on Monday (Sept 10).
The consideration for Ye Liang How Catering Service Pte Ltd, which operates the How's Catering brand, will be split into $3.63 million in cash and 877,193 new Neo shares at $0.57 per share upon completion. A further earn-out consideration of $0.3 million will also be payable, provided that How's Catering's total net profit for the years ending March 2019 to 2021 is more than $4 million.
The issue price of the consideration shares is a 5.2 per cent premium to Neo Group's volume-weighted average price of 54.2 cents on Aug 29, the last day of trading before the deal was signed. The consideration shares will represent 0.6 per cent of Neo Group's enlarged share capital.
Neo Group said the earnings accretive acquisition will allow it to expand its customer base and promote cross-selling opportunities, tapping How's Catering's established corporate clientele. It added that by tapping on Neo Group's procurement and logistics network, the merger will reap cost benefits and yield additional operational efficiencies.
How's Catering's book value and net tangible asset value as at May 31, 2018, was about $3.1 million, while its net profit before tax for the financial year ended Nov 30, 2017, excluding any extraordinary gain, was about $1.2 million.
The deal requires, among other conditions, completion of due diligence and board approval. No approval from Neo Group shareholders is necessary. The parties have four months to meet those conditions or extend the long-stop date, or the deal will lapse.
Said Neo Group chairman and chief executive officer Neo Kah Kiat: "As our food catering business remains the main growth driver, we are confident that the expertise and track record of How's Catering's experienced management team should propel us to strengthen our current suite of catering brands. This will also enable us to build a steady platform to pursue inorganic opportunities for food catering as well as our other business segments in the future.
"With that said, we will continue to adopt a prudent and disciplined approach when prospecting for potential targets with the objective of driving bottom-line growth."
Neo Group takes 51% stake in How's Catering for up to $4.4m in cash and shares
https://www.straitstimes.com/busine...group-takes-51-stake-in-hows-catering-for-44m
SINGAPORE - Catalist-listed food solutions provider Neo Group is acquiring a 51-per cent stake in privately held How's Catering for up to $4.4 million in cash and shares, it announced on Monday (Sept 10).
The consideration for Ye Liang How Catering Service Pte Ltd, which operates the How's Catering brand, will be split into $3.63 million in cash and 877,193 new Neo shares at $0.57 per share upon completion. A further earn-out consideration of $0.3 million will also be payable, provided that How's Catering's total net profit for the years ending March 2019 to 2021 is more than $4 million.
The issue price of the consideration shares is a 5.2 per cent premium to Neo Group's volume-weighted average price of 54.2 cents on Aug 29, the last day of trading before the deal was signed. The consideration shares will represent 0.6 per cent of Neo Group's enlarged share capital.
Neo Group said the earnings accretive acquisition will allow it to expand its customer base and promote cross-selling opportunities, tapping How's Catering's established corporate clientele. It added that by tapping on Neo Group's procurement and logistics network, the merger will reap cost benefits and yield additional operational efficiencies.
How's Catering's book value and net tangible asset value as at May 31, 2018, was about $3.1 million, while its net profit before tax for the financial year ended Nov 30, 2017, excluding any extraordinary gain, was about $1.2 million.
The deal requires, among other conditions, completion of due diligence and board approval. No approval from Neo Group shareholders is necessary. The parties have four months to meet those conditions or extend the long-stop date, or the deal will lapse.
Said Neo Group chairman and chief executive officer Neo Kah Kiat: "As our food catering business remains the main growth driver, we are confident that the expertise and track record of How's Catering's experienced management team should propel us to strengthen our current suite of catering brands. This will also enable us to build a steady platform to pursue inorganic opportunities for food catering as well as our other business segments in the future.
"With that said, we will continue to adopt a prudent and disciplined approach when prospecting for potential targets with the objective of driving bottom-line growth."
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Shion
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A whole new ball game for Neo Group
A whole new ball game for Neo Group
CEO Neo Kah Kiat is eyeing a spin-off for its DoDo fish ball unit as he grows and rejigs the group's three other units.
https://www.sgsme.sg/news/whole-new...BTk7YAHk9mFTWkX5aqj1_P-_ffQYGw0Ws6p3Fz08LQHOY
INVESTORS could get an extra bite out of DoDo fish balls if the brand goes public, as the chief executive of parent Neo Group suggested in a recent chat with The Business Times.
The Catalist-listed group is known for catering, which makes up about 37 per cent of the business. But founder, chairman and CEO Neo Kah Kiat envisions that share falling to 25 per cent as he grows and rejigs the three other units: food manufacturing, retail and supplies and trading.
Revenue has been falling in the supplies and trading business, which is undergoing an overhaul, as Neo Group pares subsidiary U-Market Place Enterprise's trading operations.
U-Market imports frozen food and makes rice dumplings under the Joo Chiat Kim Choo brand. But recent group financial statements have highlighted "an intentional reduction in low-margin trading transactions".
"We want to do more services where we cut or process for clients, rather than trade," said Mr Neo, who wants to focus on business-to-business (B2B) supply and a move into business-to-consumer (B2C) offerings.
"With trading, we are also going to e-commerce," he added. "We want to move in within one to two years. We're looking at how we want to capture it because we have data from how we're doing a lot of B2C in catering."
If a new business underperforms, as U-Market did, he is not averse to slowing down to re-assess things.
"When I bought this company, I wanted to grow it, but it was not that ready," he said. "I found that we should move it to a break-even point and from there, start to grow again. That's the way I run a business: When I find this company not doing very well, make it lean and then slowly take off."
Merger ... and merdeka?
Mr Neo also floated the idea of a listing for the 80.7 per cent-owned Thong Siek unit, which makes DoDo-branded fish paste products. It could go public depending on how it does in the next few years, he said, but declined to give more details.
Neo Group had bought a 55 per cent stake for S$7.35 million in 2015 and raised its interest last month.
And there just seems to be no stopping the shopping. The group announced in April that it would take a 51 per cent stake in Lavish Dine Catering, followed by a similar buy-in with How's Catering in September.
The spate of purchases came even though Neo Group posted losses again in its latest half year. Its net loss shrank to S$236,000 for the six months to Sept 30, down from S$1.2 million in same period the year prior.
Mr Neo attributes the fall into the red to his zeal for new purchases. "If I did not have all these new businesses, I would be profitable. We have one arm that is the most profitable," he said, referring to the catering core.
"So this is the muscle that I have. Then why do I say that I need to continue to acquire? It's because I have one arm that is very profitable and can continue to generate profits. That allows me to continue to acquire. And when we bought Thong Siek, there were significant losses. Now, we have made it profitable. We might also think of spinning it off for a listing."
Going overseas
The food manufacturing arm pulled in S$49.4 million in the year to March 31 and sells to 25 global markets. Neo Group is eyeing revenue growth of between 5 per cent and 10 per cent this year in this division, and also plans to open one or two overseas sales offices in the coming year.
The group is eyeing additions to its manufacturing portfolio, and "you see that we are also very aggressive in M&A of caterers", said Mr Neo, as mergers and acquisitions (M&As) "are oxygen to me and to the company".
"A company that is stagnant and not growing is a challenge . . . It's a good company if the revenue continues to grow and you've increased the segments and brands," he said.
"With M&As, you are not only buying a company. You're also buying the management and their skill. We can leverage on one another."
Mr Neo added: "It's like when I bought Lavish (Dine), because they were doing the high-end market. It's not that Neo Group couldn't do it; but we'd take time to do it."
His strategy is to take a majority interest - but not cough up for full ownership without compelling reasons.
Asked if he would buy out other caterers, he clarified: "I'd say a certain percentage - a majority stake - because I still want them to run it. I want everyone to win when I'm buying a company. I don't want to buy 100 per cent, unless they were going to retire and it's an arm that I don't have . . . In the catering business, you need to have some ownership. When we buy them and they run it, we will help them to grow; I'm interested in that."
Lavish Dine and How's are still managed by the original owners, Mr Neo noted, while institutional catering brand Gourmetz, which serves the childcare and eldercare segments, was 51 per cent-owned from the get-go.
"We can help them bring down the food costs or support them during peak periods, as well as with strategic planning," he added. "To fully acquire - not now. If a brand were strong enough, then I might consider it."
Retail tale
Mr Neo values making acquisitions across the entire supply chain: "Recently, we bought Hi-Q Plastic Industries because they were able to customise for us the plastic items," he said.
"They can do packaging specially for us, which you cannot find in the market. Or we bought Thong Siek because we can ask them to manufacture not only our fishballs but now sotong balls, scallops, spring rolls, samosas and even fritters as well, so the consistency is there."
He also plans to grow the food retail segment, where the group has an advantage over other players, thanks to synergies with the manufacturing business. Turnover from food retail fell by 10.9 per cent year on year to S$16.8 million in FY2018, which the group attributed to the closure of outlets that were not performing.
But Mr Neo held that "there is still a lot of room" to enter the market, especially with fast food concepts. "Competition is definitely fierce, but you can still find a way to get that profitability. For our kiosks, 50 per cent to 60 per cent are supplied by our central kitchen," he said. "We don't need any chefs at these kiosks . . . We went into retail because we were using central kitchens."
Mr Neo said that he was also looking at bringing in a food retail brand to Singapore - "a very strong franchise from overseas, one very solid one". This is the very opposite of his strategy for taking the group overseas. There, he wants to buy a lucrative business - lock, stock and barrel.
"I'm not going to set up store by store," Mr Neo declared. "We want to acquire a big business of around S$200 million to S$300 million, equivalent to or bigger than our size. Then it would be worthwhile for the management to be stationed there . . . If I were to go overseas, organic growth would be too much effort."
Asked how Neo Group would fund acquisitions on that scale, he said that it depends on how confident both banks and shareholders are, and how big the target company is: "Maybe I could buy one for, say, S$10 million, because it already has debt."
As for whether the group will deliver profits in the first half of 2019, he exclaimed loudly: "Have to, lah."
Bite-sized
He also pushed back on the notion that the group is growing too quickly. "Now, when we acquire companies, we will acquire more strategically, because we have already acquired so many," he said. "Two to three M&As a year, I don't find it too fast. Bite-sized, profitable, small ones in Singapore."
Mr Neo, who aims for Neo Group's annual turnover to hit S$1 billion by 2025, promised: "Next year, the companies will start to be even better. There's no need to worry about a small little loss, because we set up new companies, new identities . . . The cost is there, and you need time - six months, a year - before you can recover."
A whole new ball game for Neo Group
CEO Neo Kah Kiat is eyeing a spin-off for its DoDo fish ball unit as he grows and rejigs the group's three other units.
https://www.sgsme.sg/news/whole-new...BTk7YAHk9mFTWkX5aqj1_P-_ffQYGw0Ws6p3Fz08LQHOY
INVESTORS could get an extra bite out of DoDo fish balls if the brand goes public, as the chief executive of parent Neo Group suggested in a recent chat with The Business Times.
The Catalist-listed group is known for catering, which makes up about 37 per cent of the business. But founder, chairman and CEO Neo Kah Kiat envisions that share falling to 25 per cent as he grows and rejigs the three other units: food manufacturing, retail and supplies and trading.
Revenue has been falling in the supplies and trading business, which is undergoing an overhaul, as Neo Group pares subsidiary U-Market Place Enterprise's trading operations.
U-Market imports frozen food and makes rice dumplings under the Joo Chiat Kim Choo brand. But recent group financial statements have highlighted "an intentional reduction in low-margin trading transactions".
"We want to do more services where we cut or process for clients, rather than trade," said Mr Neo, who wants to focus on business-to-business (B2B) supply and a move into business-to-consumer (B2C) offerings.
"With trading, we are also going to e-commerce," he added. "We want to move in within one to two years. We're looking at how we want to capture it because we have data from how we're doing a lot of B2C in catering."
If a new business underperforms, as U-Market did, he is not averse to slowing down to re-assess things.
"When I bought this company, I wanted to grow it, but it was not that ready," he said. "I found that we should move it to a break-even point and from there, start to grow again. That's the way I run a business: When I find this company not doing very well, make it lean and then slowly take off."
Merger ... and merdeka?
Mr Neo also floated the idea of a listing for the 80.7 per cent-owned Thong Siek unit, which makes DoDo-branded fish paste products. It could go public depending on how it does in the next few years, he said, but declined to give more details.
Neo Group had bought a 55 per cent stake for S$7.35 million in 2015 and raised its interest last month.
And there just seems to be no stopping the shopping. The group announced in April that it would take a 51 per cent stake in Lavish Dine Catering, followed by a similar buy-in with How's Catering in September.
The spate of purchases came even though Neo Group posted losses again in its latest half year. Its net loss shrank to S$236,000 for the six months to Sept 30, down from S$1.2 million in same period the year prior.
Mr Neo attributes the fall into the red to his zeal for new purchases. "If I did not have all these new businesses, I would be profitable. We have one arm that is the most profitable," he said, referring to the catering core.
"So this is the muscle that I have. Then why do I say that I need to continue to acquire? It's because I have one arm that is very profitable and can continue to generate profits. That allows me to continue to acquire. And when we bought Thong Siek, there were significant losses. Now, we have made it profitable. We might also think of spinning it off for a listing."
Going overseas
The food manufacturing arm pulled in S$49.4 million in the year to March 31 and sells to 25 global markets. Neo Group is eyeing revenue growth of between 5 per cent and 10 per cent this year in this division, and also plans to open one or two overseas sales offices in the coming year.
The group is eyeing additions to its manufacturing portfolio, and "you see that we are also very aggressive in M&A of caterers", said Mr Neo, as mergers and acquisitions (M&As) "are oxygen to me and to the company".
"A company that is stagnant and not growing is a challenge . . . It's a good company if the revenue continues to grow and you've increased the segments and brands," he said.
"With M&As, you are not only buying a company. You're also buying the management and their skill. We can leverage on one another."
Mr Neo added: "It's like when I bought Lavish (Dine), because they were doing the high-end market. It's not that Neo Group couldn't do it; but we'd take time to do it."
His strategy is to take a majority interest - but not cough up for full ownership without compelling reasons.
Asked if he would buy out other caterers, he clarified: "I'd say a certain percentage - a majority stake - because I still want them to run it. I want everyone to win when I'm buying a company. I don't want to buy 100 per cent, unless they were going to retire and it's an arm that I don't have . . . In the catering business, you need to have some ownership. When we buy them and they run it, we will help them to grow; I'm interested in that."
Lavish Dine and How's are still managed by the original owners, Mr Neo noted, while institutional catering brand Gourmetz, which serves the childcare and eldercare segments, was 51 per cent-owned from the get-go.
"We can help them bring down the food costs or support them during peak periods, as well as with strategic planning," he added. "To fully acquire - not now. If a brand were strong enough, then I might consider it."
Retail tale
Mr Neo values making acquisitions across the entire supply chain: "Recently, we bought Hi-Q Plastic Industries because they were able to customise for us the plastic items," he said.
"They can do packaging specially for us, which you cannot find in the market. Or we bought Thong Siek because we can ask them to manufacture not only our fishballs but now sotong balls, scallops, spring rolls, samosas and even fritters as well, so the consistency is there."
He also plans to grow the food retail segment, where the group has an advantage over other players, thanks to synergies with the manufacturing business. Turnover from food retail fell by 10.9 per cent year on year to S$16.8 million in FY2018, which the group attributed to the closure of outlets that were not performing.
But Mr Neo held that "there is still a lot of room" to enter the market, especially with fast food concepts. "Competition is definitely fierce, but you can still find a way to get that profitability. For our kiosks, 50 per cent to 60 per cent are supplied by our central kitchen," he said. "We don't need any chefs at these kiosks . . . We went into retail because we were using central kitchens."
Mr Neo said that he was also looking at bringing in a food retail brand to Singapore - "a very strong franchise from overseas, one very solid one". This is the very opposite of his strategy for taking the group overseas. There, he wants to buy a lucrative business - lock, stock and barrel.
"I'm not going to set up store by store," Mr Neo declared. "We want to acquire a big business of around S$200 million to S$300 million, equivalent to or bigger than our size. Then it would be worthwhile for the management to be stationed there . . . If I were to go overseas, organic growth would be too much effort."
Asked how Neo Group would fund acquisitions on that scale, he said that it depends on how confident both banks and shareholders are, and how big the target company is: "Maybe I could buy one for, say, S$10 million, because it already has debt."
As for whether the group will deliver profits in the first half of 2019, he exclaimed loudly: "Have to, lah."
Bite-sized
He also pushed back on the notion that the group is growing too quickly. "Now, when we acquire companies, we will acquire more strategically, because we have already acquired so many," he said. "Two to three M&As a year, I don't find it too fast. Bite-sized, profitable, small ones in Singapore."
Mr Neo, who aims for Neo Group's annual turnover to hit S$1 billion by 2025, promised: "Next year, the companies will start to be even better. There's no need to worry about a small little loss, because we set up new companies, new identities . . . The cost is there, and you need time - six months, a year - before you can recover."
Shion
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Neo Group breaks ground on new high-tech HQ, to lease space to F&B start-ups
Neo Group breaks ground on new high-tech HQ, to lease space to F&B start-ups
https://www.straitstimes.com/busine...n-new-high-tech-hq-to-lease-space-to-fb-start
SINGAPORE - Neo Group will be consolidating its operations in a new high-tech headquarters and catering hub, expected to be completed in the fourth quarter of 2020, it announced on Friday (March 15).
The company broke ground on Friday for a 10-storey building at 30B Quality Road that will span 300,000 square feet and replace the group's current headquarters in Enterprise Road.
Through the new integrated facility, the group will consolidate its central kitchens, offices, warehouses, logistics and storage facilities, and other food and beverage (F&B) operations in one location.
This will result in "significant cost savings", said Neo Kah Kiat, founder, chairman and chief executive of Neo Group. The company told The Business Times that it was too early to comment on the amount.
Mr Neo added that the improvements in operational efficiencies via automation would also boost production levels and "substantially reduce" demand for manpower. When asked how existing manpower will be impacted, a spokesman said there would be "no significant changes" as the new facility is larger and has a higher production capacity than the existing one.
"We will also increase our focus in skills redevelopment and training for both our corporate and operational crew to increase their productivity. Through the use of automation, we will be able to achieve a higher level of production. Depending on our operations, we may even need to hire new staff to cater to rising demand as we ramp up operations," the spokesman added.
The consolidation of central kitchens will increase capacity five times to 250,000 meals per day from 50,000 meals per day.
Leveraging economies of scale, the hub will also provide co-working kitchen and office spaces, which will be available for lease. Neo Group said it will work with budding F&B start-ups on a flexi-rental scheme.
Said Mr Neo: "Many small-scale businesses with interesting concepts often find themselves between a rock and a hard place as they try to grow their business. This is mainly because the cost of setting up a licensed and fully equipped commercial-scale kitchen and office may not be a viable option. With that in mind, we will designate co-working facilities for our partners' use, which will also benefit Neo Group through a steady stream of recurring income.
"Through this form of collaboration, we are able to forge a strong working relationship with our partners, which could present us with the opportunity to participate in their businesses as they grow."
The new headquarters will also house the group's corporate office and a research and development (R&D) centre which will have experts and nutritionists focusing on healthy menu product development. Other features include offering dining facilities for social events that can accommodate over 500 guests.
Shares of Neo Group last traded at $0.425 apiece on March 12.
Neo Group breaks ground on new high-tech HQ, to lease space to F&B start-ups
https://www.straitstimes.com/busine...n-new-high-tech-hq-to-lease-space-to-fb-start
SINGAPORE - Neo Group will be consolidating its operations in a new high-tech headquarters and catering hub, expected to be completed in the fourth quarter of 2020, it announced on Friday (March 15).
The company broke ground on Friday for a 10-storey building at 30B Quality Road that will span 300,000 square feet and replace the group's current headquarters in Enterprise Road.
Through the new integrated facility, the group will consolidate its central kitchens, offices, warehouses, logistics and storage facilities, and other food and beverage (F&B) operations in one location.
This will result in "significant cost savings", said Neo Kah Kiat, founder, chairman and chief executive of Neo Group. The company told The Business Times that it was too early to comment on the amount.
Mr Neo added that the improvements in operational efficiencies via automation would also boost production levels and "substantially reduce" demand for manpower. When asked how existing manpower will be impacted, a spokesman said there would be "no significant changes" as the new facility is larger and has a higher production capacity than the existing one.
"We will also increase our focus in skills redevelopment and training for both our corporate and operational crew to increase their productivity. Through the use of automation, we will be able to achieve a higher level of production. Depending on our operations, we may even need to hire new staff to cater to rising demand as we ramp up operations," the spokesman added.
The consolidation of central kitchens will increase capacity five times to 250,000 meals per day from 50,000 meals per day.
Leveraging economies of scale, the hub will also provide co-working kitchen and office spaces, which will be available for lease. Neo Group said it will work with budding F&B start-ups on a flexi-rental scheme.
Said Mr Neo: "Many small-scale businesses with interesting concepts often find themselves between a rock and a hard place as they try to grow their business. This is mainly because the cost of setting up a licensed and fully equipped commercial-scale kitchen and office may not be a viable option. With that in mind, we will designate co-working facilities for our partners' use, which will also benefit Neo Group through a steady stream of recurring income.
"Through this form of collaboration, we are able to forge a strong working relationship with our partners, which could present us with the opportunity to participate in their businesses as they grow."
The new headquarters will also house the group's corporate office and a research and development (R&D) centre which will have experts and nutritionists focusing on healthy menu product development. Other features include offering dining facilities for social events that can accommodate over 500 guests.
Shares of Neo Group last traded at $0.425 apiece on March 12.
Shion
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- Oct 24, 2008
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Food caterer Neo Group to diversify into property business with Boldtek JV
Food caterer Neo Group to diversify into property business with Boldtek JV
https://www.businesstimes.com.sg/co...ersify-into-property-business-with-boldtek-jv
NEO Group is looking to make its foray into property development, investment and management.
This will mean expanding its existing core business of providing end-to-end food and catering solutions, the Catalist-listed firm announced in a regulatory filing on Friday.
Neo Group has four main business segments - food catering, food manufacturing, food retail, and supplies and trading.
It plans to form a Singapore-incorporated joint-venture (JV) company with construction firm Boldtek Holdings to carry out the new property business.
Catalist-listed Boldtek and Neo Group on Friday inked a JV agreement, in connection with the proposed diversification.
Operating in Singapore and Malaysia, Boldtek provides general building services, runs a precast manufacturing plant, and has a property development and investment business. It also has interests in soil investigation and treatment.
Neo Group noted that the property industry will provide diversified business opportunities, broaden the group's stream of income and revenue, and enhance shareholder value.
The new business will likely bring benefits, including additional and recurrent revenue streams, such as from rental fees and management fees, the company added.
Besides, there are potential synergies, as the property-related assets under the new division may be leased to its existing food businesses so as to reduce possible rental disruption with third-party landlords.
Neo Group will also be able to cater to a wider range of customers, including venue partners and tenants, in its property-related assets.
"The group can leverage its current networks, experience and knowledge in the operation of food and beverage businesses, such as cafeterias, restaurants, bistros and bars, providing quick service and event management solutions," Neo Group said.
Another benefit of the proposed business is a more diversified business and income base, which will reduce reliance on the existing business, it added.
Neo Group will venture into the property business "prudently". It does not plan to restrict the property business to any geographical market.
In a separate filing on Friday, Boldtek's board of directors said the proposed JV will help increase Boldtek's involvement in the property development business and expand beyond its core business of general building and construction.
Boldtek did not have any property development projects in the pipeline as at Friday, and the segment accounted for just 1.8 per cent of group revenue in FY2019.
Moreover, the JV will allow Boldtek to leverage Neo Group's business networks and resources while maximising existing revenue streams, the board added.
Boldtek and Neo Group were independent and unrelated parties with no prior business, commercial or trade dealings before the JV agreement was signed.
Neo Group will convene an extraordinary general meeting to seek shareholders' approval for the proposed diversification, which is expected to change the company's risk profile.
The JV agreement will terminate if shareholders do not approve the diversification.
Shares of Neo Group rose 3.5 Singapore cents or 6.3 per cent to trade at 59.5 cents as at 2.36pm on Friday. Boldtek shares last traded at 9.7 cents on Aug 21.
Food caterer Neo Group to diversify into property business with Boldtek JV
https://www.businesstimes.com.sg/co...ersify-into-property-business-with-boldtek-jv
NEO Group is looking to make its foray into property development, investment and management.
This will mean expanding its existing core business of providing end-to-end food and catering solutions, the Catalist-listed firm announced in a regulatory filing on Friday.
Neo Group has four main business segments - food catering, food manufacturing, food retail, and supplies and trading.
It plans to form a Singapore-incorporated joint-venture (JV) company with construction firm Boldtek Holdings to carry out the new property business.
Catalist-listed Boldtek and Neo Group on Friday inked a JV agreement, in connection with the proposed diversification.
Operating in Singapore and Malaysia, Boldtek provides general building services, runs a precast manufacturing plant, and has a property development and investment business. It also has interests in soil investigation and treatment.
Neo Group noted that the property industry will provide diversified business opportunities, broaden the group's stream of income and revenue, and enhance shareholder value.
The new business will likely bring benefits, including additional and recurrent revenue streams, such as from rental fees and management fees, the company added.
Besides, there are potential synergies, as the property-related assets under the new division may be leased to its existing food businesses so as to reduce possible rental disruption with third-party landlords.
Neo Group will also be able to cater to a wider range of customers, including venue partners and tenants, in its property-related assets.
"The group can leverage its current networks, experience and knowledge in the operation of food and beverage businesses, such as cafeterias, restaurants, bistros and bars, providing quick service and event management solutions," Neo Group said.
Another benefit of the proposed business is a more diversified business and income base, which will reduce reliance on the existing business, it added.
Neo Group will venture into the property business "prudently". It does not plan to restrict the property business to any geographical market.
In a separate filing on Friday, Boldtek's board of directors said the proposed JV will help increase Boldtek's involvement in the property development business and expand beyond its core business of general building and construction.
Boldtek did not have any property development projects in the pipeline as at Friday, and the segment accounted for just 1.8 per cent of group revenue in FY2019.
Moreover, the JV will allow Boldtek to leverage Neo Group's business networks and resources while maximising existing revenue streams, the board added.
Boldtek and Neo Group were independent and unrelated parties with no prior business, commercial or trade dealings before the JV agreement was signed.
Neo Group will convene an extraordinary general meeting to seek shareholders' approval for the proposed diversification, which is expected to change the company's risk profile.
The JV agreement will terminate if shareholders do not approve the diversification.
Shares of Neo Group rose 3.5 Singapore cents or 6.3 per cent to trade at 59.5 cents as at 2.36pm on Friday. Boldtek shares last traded at 9.7 cents on Aug 21.
Shion
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Neo Group shareholders vote yes on property business diversification
Neo Group shareholders vote yes on property business diversification
https://www.businesstimes.com.sg/co...vote-yes-on-property-business-diversification
CATALIST-LISTED caterer and food manufacturer Neo Group can now expand into the property business, with shareholders having unanimously approved the diversification at an extraordinary general meeting (EGM) on Thursday morning.
Shareholders representing about 124 million shares voted in favour of the move, with no votes against the resolution, according to ballot results released after the market close. No party was required to abstain from voting.
Neo Group last month announced plans to go into property development, investment and management, through a joint venture (JV) with Catalist-listed Boldtek Holdings. It will hold a half-stake in a JV company with an initial share capital of S$1 million.
The board had said the move could open revenue streams from rent and management fees, synergies with Neo Group's other businesses.
But Neo Group is still looking for opportunities in its core catering and food manufacturing business, and the board does not expect any immediate or significant change in the company's overall revenue mix at this stage.
DrewCorp Services served as the appointed scrutineer for the EGM, which was held electronically.
The counter closed at S$0.49 on a cum-dividend basis, down by S$0.02 or 3.92 per cent.
Neo Group shareholders vote yes on property business diversification
https://www.businesstimes.com.sg/co...vote-yes-on-property-business-diversification
CATALIST-LISTED caterer and food manufacturer Neo Group can now expand into the property business, with shareholders having unanimously approved the diversification at an extraordinary general meeting (EGM) on Thursday morning.
Shareholders representing about 124 million shares voted in favour of the move, with no votes against the resolution, according to ballot results released after the market close. No party was required to abstain from voting.
Neo Group last month announced plans to go into property development, investment and management, through a joint venture (JV) with Catalist-listed Boldtek Holdings. It will hold a half-stake in a JV company with an initial share capital of S$1 million.
The board had said the move could open revenue streams from rent and management fees, synergies with Neo Group's other businesses.
But Neo Group is still looking for opportunities in its core catering and food manufacturing business, and the board does not expect any immediate or significant change in the company's overall revenue mix at this stage.
DrewCorp Services served as the appointed scrutineer for the EGM, which was held electronically.
The counter closed at S$0.49 on a cum-dividend basis, down by S$0.02 or 3.92 per cent.
Shion
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- 110,150
Neo Group reports 486.5% surge in 1H earnings to $13.6 mil on higher other income and reduction in o
Neo Group reports 486.5% surge in 1H earnings to $13.6 mil on higher other income and reduction in operating expenses
https://www.theedgesingapore.com/ca...ngs-136-mil-higher-other-income-and-reduction
Neo Group Limited has reported earnings of $13.6 million for the 1HFY2020/2021 ended Sept 30, 2020, some 486.5% up from the earnings of $2.3 million reported a year ago. This was mainly due to higher other income of $9.17 million, which was an increase of 846.6% compared to the $0.97 million a year ago.
This brings earnings per share for 1HFY2020/2021 to 9.24 cents, a significant increase from just 1.58 cents in the previous year.
The $8.2 million increase in other income was primarily attributable to the higher financial grants received from the government during the period, where some $8.0 million represents support for wages and property tax rebates passed down from the landlords.
The higher earnings were also due to the decrease in delivery expenses, as well as expenses for employee benefits, advertising and others such as credit card charges and for repair and maintenance.
During this period, Neo Group announced that it has reorganised its business segments based on its services into four operating segments: catering; manufacturing; supplies and trading; and retail.
Overall, revenue for the 1HFY2020/2021 fell 3.3% y-o-y to $88.1 million, mainly due to the decrease in revenue from the supplies and trading business, as well as the retail business.
The supplies and trading business revenue decreased by 25.1% y-o-y to $11.6 million, mainly attributable to a reduction in low margin trading transactions in the frozen meat business. The retail business on the other hand saw a 26.1% y-o-y drop to $5.5 million, mainly due to the significant drop in physical footfall at the group’s retail outlets and malls during the pandemic.
The fall in revenue was partially offset by the increase in contribution by the catering and manufacturing businesses.
Catering business saw a slight 1.7% y-o-y growth to $44.8 million, due to the short-term dormitory contracts and the strengthening of its recurring income from the “tingkat” business, partially offset by the decline in the traditional catering business. Manufacturing business saw a 10.8% y-o-y increase to $26.2 million, mainly due to higher sales from supermarkets and export business.
As at end-September, the group’s cash and cash equivalents stood at $28.3 million.
The board has also declared an interim dividend of 1.0 cent per share, which will be payable Nov 27. Neo Group did not payout an interim dividend last year.
Moving forward, the group says that it will focus on growing the market share of its catering business by building upon its strong market recognition and branding, while strengthening its recurring income streams through pursuing institutional catering.
Leveraging on its synergistic business segments, the group says that it will continue expanding the range of its product offerings and options to capture the changing consumer behaviour. Its central kitchens, which are strategically located across Singapore, will support the growth of its business through economies of scale.
Neo Kah Kiat, founder, chairman and CEO of Neo Group says, “Through our diversification into the property business, we aim to unlock additional and recurring revenue streams through rental fees and management fees, as well as potential and beneficial synergies with our existing businesses. This will further diversify our business, strengthen our income base for future growth and enhance shareholders’ value.”
Shares in Neo Group closed 15.3% or 6.5 cents higher on Nov 9 at 49 cents.
Neo Group reports 486.5% surge in 1H earnings to $13.6 mil on higher other income and reduction in operating expenses
https://www.theedgesingapore.com/ca...ngs-136-mil-higher-other-income-and-reduction
Neo Group Limited has reported earnings of $13.6 million for the 1HFY2020/2021 ended Sept 30, 2020, some 486.5% up from the earnings of $2.3 million reported a year ago. This was mainly due to higher other income of $9.17 million, which was an increase of 846.6% compared to the $0.97 million a year ago.
This brings earnings per share for 1HFY2020/2021 to 9.24 cents, a significant increase from just 1.58 cents in the previous year.
The $8.2 million increase in other income was primarily attributable to the higher financial grants received from the government during the period, where some $8.0 million represents support for wages and property tax rebates passed down from the landlords.
The higher earnings were also due to the decrease in delivery expenses, as well as expenses for employee benefits, advertising and others such as credit card charges and for repair and maintenance.
During this period, Neo Group announced that it has reorganised its business segments based on its services into four operating segments: catering; manufacturing; supplies and trading; and retail.
Overall, revenue for the 1HFY2020/2021 fell 3.3% y-o-y to $88.1 million, mainly due to the decrease in revenue from the supplies and trading business, as well as the retail business.
The supplies and trading business revenue decreased by 25.1% y-o-y to $11.6 million, mainly attributable to a reduction in low margin trading transactions in the frozen meat business. The retail business on the other hand saw a 26.1% y-o-y drop to $5.5 million, mainly due to the significant drop in physical footfall at the group’s retail outlets and malls during the pandemic.
The fall in revenue was partially offset by the increase in contribution by the catering and manufacturing businesses.
Catering business saw a slight 1.7% y-o-y growth to $44.8 million, due to the short-term dormitory contracts and the strengthening of its recurring income from the “tingkat” business, partially offset by the decline in the traditional catering business. Manufacturing business saw a 10.8% y-o-y increase to $26.2 million, mainly due to higher sales from supermarkets and export business.
As at end-September, the group’s cash and cash equivalents stood at $28.3 million.
The board has also declared an interim dividend of 1.0 cent per share, which will be payable Nov 27. Neo Group did not payout an interim dividend last year.
Moving forward, the group says that it will focus on growing the market share of its catering business by building upon its strong market recognition and branding, while strengthening its recurring income streams through pursuing institutional catering.
Leveraging on its synergistic business segments, the group says that it will continue expanding the range of its product offerings and options to capture the changing consumer behaviour. Its central kitchens, which are strategically located across Singapore, will support the growth of its business through economies of scale.
Neo Kah Kiat, founder, chairman and CEO of Neo Group says, “Through our diversification into the property business, we aim to unlock additional and recurring revenue streams through rental fees and management fees, as well as potential and beneficial synergies with our existing businesses. This will further diversify our business, strengthen our income base for future growth and enhance shareholders’ value.”
Shares in Neo Group closed 15.3% or 6.5 cents higher on Nov 9 at 49 cents.
reddevil0728
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why ah???????
Shion
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Neo Group to acquire 51% stake in snack maker
Neo Group to acquire 51% stake in snack maker
https://www.businesstimes.com.sg/companies-markets/neo-group-to-acquire-51-stake-in-snack-maker
CATALIST-LISTED food caterer Neo Group is acquiring a 51 per cent stake in local snack manufacturer Royale International Food Industries (RIFI) for S$1.02 million in cash, it said in an exchange filing on Wednesday.
The proposed acquisition is being carried out via wholly-owned subsidiary Thong Siek Global, with the consideration financed by internal cash resources and/or bank borrowings.
Neo Group's chairman and chief executive officer Neo Kah Kiat said the move is a "strategic fit" for its food-manufacturing business, and the diversification into snack food products will broaden the group's revenue stream, with the added benefit of expanding into new overseas markets.
RIFI is principally engaged in the manufacture of snacks under its flagship brand, Crusty's, with a selection of ready-to-eat products such as potato chips, fish skin and soy-based snacks. Neo Group said these snacks are available locally in Singapore, and also exported and sold in overseas markets such as Australia, China, the US and Malaysia.
Mr Neo said: "In line with our growth strategies, we intend to actively expand our product offerings to cater to different market segments, to meet changing consumer demand and capture growth opportunities in snacks and ready-to-eat products.
"This earnings-accretive acquisition will also allow us to create new income streams, drive our export sales to new and existing markets worldwide, tapping both parties' well-established network across over 30 countries globally."
Neo Group said the proposed acquisition is not expected to have any material impact on the group's consolidated net tangible assets or earnings per share for its current financial year ending March 31.
Shares of Neo Group fell one per cent or 0.5 Singapore cent on Wednesday to close at 52.5 cents before the announcement.
Neo Group to acquire 51% stake in snack maker
https://www.businesstimes.com.sg/companies-markets/neo-group-to-acquire-51-stake-in-snack-maker
CATALIST-LISTED food caterer Neo Group is acquiring a 51 per cent stake in local snack manufacturer Royale International Food Industries (RIFI) for S$1.02 million in cash, it said in an exchange filing on Wednesday.
The proposed acquisition is being carried out via wholly-owned subsidiary Thong Siek Global, with the consideration financed by internal cash resources and/or bank borrowings.
Neo Group's chairman and chief executive officer Neo Kah Kiat said the move is a "strategic fit" for its food-manufacturing business, and the diversification into snack food products will broaden the group's revenue stream, with the added benefit of expanding into new overseas markets.
RIFI is principally engaged in the manufacture of snacks under its flagship brand, Crusty's, with a selection of ready-to-eat products such as potato chips, fish skin and soy-based snacks. Neo Group said these snacks are available locally in Singapore, and also exported and sold in overseas markets such as Australia, China, the US and Malaysia.
Mr Neo said: "In line with our growth strategies, we intend to actively expand our product offerings to cater to different market segments, to meet changing consumer demand and capture growth opportunities in snacks and ready-to-eat products.
"This earnings-accretive acquisition will also allow us to create new income streams, drive our export sales to new and existing markets worldwide, tapping both parties' well-established network across over 30 countries globally."
Neo Group said the proposed acquisition is not expected to have any material impact on the group's consolidated net tangible assets or earnings per share for its current financial year ending March 31.
Shares of Neo Group fell one per cent or 0.5 Singapore cent on Wednesday to close at 52.5 cents before the announcement.
Shion
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Neo Group founder seeks to take firm private via voluntary conditional cash offer
https://www.businesstimes.com.sg/co...-private-via-voluntary-conditional-cash-offer
NEO Group founder, chairman and chief executive officer Neo Kah Kiat intends to take the Catalist-listed food caterer private via a voluntary conditional cash offer at S$0.60 per share, the firm announced on Tuesday after market close.
The offeror, Forestt Investment, was incorporated for the purpose of the offer, with its directors being Mr Neo and Neo Group executive director Liew Oi Peng.
Mr Neo and Ms Liew, who hold 76.79 per cent and 5.47 per cent of shares in Neo Group respectively - for a total of 82.26 per cent - have given their irrevocable undertakings for the offer.
The offer is an opportunity for shareholders to realise their investment "at a premium to historical prices without incurring brokerage and trading costs in an uncertain economic environment", said the offeror.
The offer price of S$0.60 per share is the highest closing price of the shares in over 2.5 years before March 29, the last trading day.
It represents a premium of 17.9 per cent, 14.5 per cent, 15.4 per cent, and 31 per cent, respectively, over the volume-weighted average price per share for the one-month, three-month, six-month, and 12-month periods up to and including the last trading day.
The offeror said it believes that delisting and privatising Neo Group will allow "greater control and management flexibility" to manage the business, respond to changing market conditions, and optimise the use of management and resources.
The offer document will be despatched to shareholders between 14 and 21 days from Tuesday's announcement, with the offer remaining open for acceptances by shareholders for at least 28 days from the offer document's date of posting.
The board will appoint an independent financial adviser (IFA) to advise the independent directors. A circular with the advice of the IFA and recommendations of the independent directors will be sent to shareholders within 14 days from the offer document's date of despatch.
In the meantime, shareholders are advised to exercise caution in dealing with their shares, said Neo Group.
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