An Analysis of the Financial Situation of Bread Talk Group Ltd for the Period
3.1 Turnover growth and profitability
3.1.1 Overview
The company has experienced a high level of growth during the three year from FY2004 to FY2007 that was fueled by broad-based growth across all business segments and the successful expansion drive across all business divisions.
Group operating profit rose 42.9% to $12.0 million in FY2007, up from $7.4 million in FY2006 with the bakery business recording the strongest growth. Net profit increased by 69.8% from $4.3 million in FY2006 to $7.3 million in FY2007 on broad-based profit growth across all business segments. Net profit margin rose from 3.5% in FY2006 to 4.7% in FY2007.
3.1.2 Gross Profit Ratio
Gross profit ratio remains constant at 55% in FY2007 compared to FY2006 and FY2005 which was in line with the increase in the revenue. The company had a group’s strategy to improved sales by maintaining the selling price in order to gain more sales in the great competitive market. However, due to the soaring cost of wheat and personnel costs, the price of bread rose correspondingly. Thus, the gross profit margin remains consistent.
3.1.3 Operating Profit Ratio
The operating profit ratio of the company increased by 72% from $2.7 million in FY2004 to $4.4 million in FY2007.
The reason is that the distribution and selling expenses and administrative expenses has decreased .Thus the operating profit increase by good operation cost of control.
The net profit before tax of FY 2005 has grown by196 % to 2666 that compared to FY2004. This is caused by investment of associate and joint venture and food court business in China.
In FY2006, the Group revenue grew 29.7% to reach $123.6 million and compared with $95.3million in FY2005. These have driven mainly by strong contributions from the bakery and food court segments across all geographical segments, the Group achieve an 81.3% increase in operating profit from $4.7million in FY2005 to $8.5 million in FY2006.
Operating profits surged 64.3% from $7.4
3.1.1 Overview
The company has experienced a high level of growth during the three year from FY2004 to FY2007 that was fueled by broad-based growth across all business segments and the successful expansion drive across all business divisions.
Group operating profit rose 42.9% to $12.0 million in FY2007, up from $7.4 million in FY2006 with the bakery business recording the strongest growth. Net profit increased by 69.8% from $4.3 million in FY2006 to $7.3 million in FY2007 on broad-based profit growth across all business segments. Net profit margin rose from 3.5% in FY2006 to 4.7% in FY2007.
3.1.2 Gross Profit Ratio
Gross profit ratio remains constant at 55% in FY2007 compared to FY2006 and FY2005 which was in line with the increase in the revenue. The company had a group’s strategy to improved sales by maintaining the selling price in order to gain more sales in the great competitive market. However, due to the soaring cost of wheat and personnel costs, the price of bread rose correspondingly. Thus, the gross profit margin remains consistent.
3.1.3 Operating Profit Ratio
The operating profit ratio of the company increased by 72% from $2.7 million in FY2004 to $4.4 million in FY2007.
The reason is that the distribution and selling expenses and administrative expenses has decreased .Thus the operating profit increase by good operation cost of control.
The net profit before tax of FY 2005 has grown by196 % to 2666 that compared to FY2004. This is caused by investment of associate and joint venture and food court business in China.
In FY2006, the Group revenue grew 29.7% to reach $123.6 million and compared with $95.3million in FY2005. These have driven mainly by strong contributions from the bakery and food court segments across all geographical segments, the Group achieve an 81.3% increase in operating profit from $4.7million in FY2005 to $8.5 million in FY2006.
Operating profits surged 64.3% from $7.4