YOCB FY14Q4 Financial Result
| YOCB (RM mil) | FY14Q4 | FY14Q3 | FY14Q2 | FY14Q1 | FY13Q4 |
| Revenue | 53.5 | 47.2 | 50.7 | 46.5 | 40.6 |
| PBT | 2.4 | 7.8 | 9.8 | 7.1 | 5.2 |
| PBT% | 4.5 | 16.5 | 19.3 | 15.3 | 12.8 |
| PAT | 2.0 | 5.9 | 6.9 | 5.2 | 3.9 |
| Total Equity | 153.0 | 154.2 | 148.3 | 144.6 | 139.3 |
| Total Assets | 196.2 | 195.6 | 195.6 | 178.9 | 177.9 |
| Trade Receivables | 52.1 | 49.7 | 56.5 | 41.1 | 40.0 |
| Inventories | 65.8 | 69.2 | 68.6 | 62.3 | 57.2 |
| Cash | 35.0 | 32.6 | 31.8 | 36.4 | 41.4 |
| Total Liabilities | 43.2 | 41.4 | 47.3 | 34.3 | 38.6 |
| Trade Payables | 14.6 | 8.2 | 14.0 | 8.0 | 11.6 |
| ST Borrowings | 25.9 | 29.0 | 29.0 | 23.2 | 24.1 |
| LT Borrowings | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Net Cash Flow | -6.4 | -8.7 | -9.6 | -5.0 | 11.5 |
| Operation | 4.7 | -0.8 | -10.9 | -0.7 | 12.6 |
| Investment | -6.4 | -6.4 | -0.3 | -0.2 | -2.0 |
| Financing | -4.6 | -1.6 | 1.7 | -4.1 | 0.9 |
| EPS | 1.24 | 3.68 | 4.34 | 3.27 | 2.44 |
| NAS | 0.96 | 0.96 | 0.93 | 0.90 | 0.87 |
| 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 |
| Investment | 0 | 0 | 6.4 | 4.8 |
| Design & Manufacturing | 33.2 | 29.0 | 4.9 | 5.7 |
| Retailing | 31.0 | 26.9 | 4.3 | 2.6 |
| 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 | 197.9 | 178.1 | 153.9 | 141.0 | 127.5 |
| Revenue growth % | 11.1 | 15.7 | 9.1 | 10.6 | |
| PBT | 27.2 | 27.4 | 23.5 | 25.2 | 21.1 |
| PBT% | -0.7 | 16.6 | -6.7 | 19.4 | |
| PAT | 20.0 | 20.2 | 17.3 | 18.3 | 15.1 |
| PAT growth % | -1.0 | 16.8 | -5.0 | 21.2 | |
| EPS | 12.53 | 12.65 | 10.8 | 15.24 | 15.5 |
| ROE | 13.1 | 14.5 |
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?
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