YOCB FY14Q4 Financial Result
|YOCB (RM mil)||FY14Q4||FY14Q3||FY14Q2||FY14Q1||FY13Q4|
|Net Cash Flow||-6.4||-8.7||-9.6||-5.0||11.5|
|Net D/E Ratio||Net Cash||Net Cash||Net Cash||Net Cash||Net Cash|
For YOCB's latest FY14Q4 results, there are 2 surprises, one positive & one negative.
The negative surprise is PBT crashed 69% & 54% both QoQ & YoY respectively to just RM2.4mil. This almost certainly means the share price might crash too.
The positive surprise is quarterly revenue reaches all-time high at RM53.5mil, despite the fact that Q4 is its weakest quarter traditionally.
If the profit falls like this because of less sales made, then it is a yellow flag and most probably I will sell.
If the profit falls but sales does not fall but instead rise to a record high, then it is a dilemma...
From YOCB super simple financial report, it just mentions that the lower profit in current quarter is due to higher operating cost, accruals & provision made for certain expenses. There is no breakdown of those expenses.
In this case I would like to know the gross margin but it is not available. Could it be due to some one-off expenses?
On the other hand, higher revenue is due to higher consignment, boutique and export sales, as well as fair & pre-Hari Raya sales.
This year Hari Raya falls on 28th & 29th July, which is only 10 days earlier than last year's 8th & 9th August. Nevertheless, FY13Q4 & FY14Q1 were its two weakest quarters in term of both revenue and profit.
YOCB Segmental Results (FY14 vs FY13)
|YOCB (RM mil)||FY14 Rev||FY13 Rev||FY14 PBT||FY13 PBT|
|Design & Manufacturing||33.2||29.0||4.9||5.7|
|Distribution & Trading||133.8||122.7||17.0||18.2|
From the analysis of segmental reporting, all 3 main business segments register increasing revenue for FY14. However, PBT of design & manufacturing and distribution & trading segments fall compared to FY13, especially in FY14Q4.
Net cash flow enters negative territory this year, mainly due to investment for future expansion, as well as increasing inventories & receivables. The increasing working capital part does raise a bit of concern earlier but I think it is still manageable at the moment.
Cash & equivalent increases RM2.4mil to RM35mil while borrowing drops RM3.1mil to RM25.9mil.
Overall in FY14, revenue grows 11% but PATAMI falls 1%. ROE falls slightly to 13.1%.
YOCB Historical Financial Results
|YOCB (RM mil)||FY14||FY13||FY12||FY11||FY10|
|Revenue growth %||11.1||15.7||9.1||10.6|
|PAT growth %||-1.0||16.8||-5.0||21.2|
It is great to note that YOCB's revenue is in an uninterrupted increasing trend since listed in FY2010. However, net profit did take a slight dip in FY12 & latest, in FY14.
EPS for FY14 is 12.5sen, so my own target price will be revised downward to RM1.25.
YOCB has declared a second interim single tier dividend of 2sen, which makes it total 4sen for FY14 which is similar to previous year.
This represents a 32% payout ratio and 3.4% dividend yield at share price of RM1.18.
On the prospect of FY15, the management expects a satisfactory growth in its financial performance, and they always mention this in their financial report.
I'm still undecided whether to keep or sell YOCB. Since it only makes up a small percentage of my portfolio, it is unwise to sell partially. Perhaps I need to wait for another 3 months for next quarter's result.
Anyway, how will other investors react towards YOCB's latest result?