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Japan Foods embarks on share buybacks; Best World resumes trading and buybacks

The Edge Singapore
The Edge Singapore11/30/2022 02:56 PM GMT+08  • 3 min read
Japan Foods embarks on share buybacks; Best World resumes trading and buybacks
Takahashi Kenichi, Japan Foods’ executive chairman and CEO, plans to develop more halal brands / Photo: Albert Chua
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Japan Foods, fresh from reporting improved earnings in the first half of the fiscal year, has been actively buying back shares throughout the month. The most recent was on Nov 29 when it bought back 100,000 shares at 43 cents each. This brings the total shares bought under the current mandate to 519,800 or 0.298% of the share base.

The last time Japan Foods bought back shares was on June 14, 2021, at 40.5 cents each for 203,000 shares.

Earlier on Nov 23, 25 and 28, it had acquired 200,000 shares at 42 cents each, 129,100 shares at 42.5 cents each and 90,700 shares at 42.5 cents each respectively.

On Nov 9, Japan Foods reported earnings of $2.3 million for 1HFY2023 ended Sept 30, reversing from the loss of $1.6 million a year earlier. Revenue was up 79% to $38 million as dining-in resumed in tandem with the easing of Covid-19 safe-management measures.

In line with better earnings, Japan Foods plans to pay an interim dividend of 1 cent per share, double that declared in 1HFY2022.

Japan Foods attributes the better numbers to its bigger footprint, particularly that of its halal outlets, which generated 25.2% of total revenue in 1HFY2023, up from 15.2% in 1HFY2022. The number of halal outlets increased from just one back in November 2020 to 12 now.

See also: Geo Energy resumes buybacks while buybacks for HRnetGroup continues

As at Sept 30, Japan Foods operates a total of 60 outlets, versus 52 outlets as at September last year.

“Looking ahead, we plan to capitalise on the growing interest in our halal brands to expand and develop more concepts that will appeal to this segment,” says executive chairman and CEO Takahashi Kenichi.

Japan Foods warns that the near-term operating environment remains challenging because of intense competition, manpower shortage and rising costs and inflationary pressures. “The group is cautiously optimistic about its second-half performance for FY2023,” says Kenichi.

See also: Jumbo and Thakral in the buyback spotlight

New lease of life

Best World International, fresh from a near four-year-long trading suspension, has been actively buying back shares a day after it had resumed trading on Nov 14.

The company, best known as a direct-seller of beauty and health products in markets such as China, was suspended back in May 2019 after it came under attack by short-sellers Bonitas Research. This led SGX RegCo to order Best World to conduct an extensive review after questions were raised over its business model.

On Nov 15, Best World acquired 600,000 shares an average of $1.63833 each. On Nov 16 and 17, it also acquired another 610,500 shares and 245,000 shares respectively at the same price.

On Nov 22 and 23, the company bought another 860,000 shares and 440,000 shares respectively. The most recent buyback was on Nov 24 when it bought back more than 1.16 million shares. The transactions bring the total number of shares bought back thus far to nearly 3.92 million shares. The shares were all bought back at between $1.61 and $1.69.

In 3QFY2022 ended Sept, Best World reported earnings of $22.1 million, down 12.1% y-o-y from $25.1 million in 3QFY2021. Revenue was down 14.6% y-o-y to $100.3 million.

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For the 9MFY2022, earnings dropped 13.5% y-o-y to $88.6 million while revenue fell 12.5% y-o-y to $346.4 million. As at Sept 30, the company’s net asset value was 101.79 cents, versus 93.44 cents per share as at Dec 31 2021.

Best World attributes the lower earnings to lower sales in China because of pandemic-related restrictions. On the other hand, distribution costs increased as it stepped up marketing activities.

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