Financial Management and Control

1Annual Report 2020

KIMLY LIMITED2

Content

01 Corporate Profile

02 Our es

03 Our Network

05 Message to Shareholders

18 Board of Directors

22 Key Management

24 Financial Highlights

26 Financial Review

30 Corporate Information

This annual report has been reviewed by the Company’s Sponsor,
PrimePartners Corporate Pte. Ltd. (the “Sponsor”). It has not
been examined or approved by the Singapore Exchange Securities
Trading Limited (the “Singapore Exchange”) and the Singapore
Exchange assume no responsibility for the contents of this document,
including the correctness of any of the statements or opinions made
or reports contained in this document.

The contact person for the Sponsor is Mr Joseph Au, 16 Collyer Quay,
#10-00 Income at Raffles, Singapore 049318, [email protected]. sg.

Kimly Limited (the “Company” or “Kimly”, and together with its subsidiaries, the
“Group”) is one of the largest traditional coffeeshop operators in Singapore with
30 years of experience. The Group operates and manages an extensive network
of 83 food outlets under “Kimly”, “foodclique” and a third party brand, 137 food
stalls comprising Mixed Vegetable Rice, Teochew Porridge, Dim Sum, Seafood
“Zi Char”, Kanaaji Japanese Tonkatsu, two Tonkichi restaurants and seven Rive
Gauche confectionery shops.

While keeping to the heritage of a traditional coffeeshop that provides affordable
food for all, Kimly is also constantly modernising to keep up with the times and
changing consumer trends. Digitalisation of payment is underway, to equip
all of its drink and food stalls with NETs unified e-payment system. All its food
retail products are currently available for online ordering through Deliveroo,
Foodpanda, GrabFood and Oddle.

The Company was successfully listed on Catalist of the SGX-ST on 20 March 2017.

Corporate
Profile

001Annual Report 2020

Our es

Outlet Management Division
Under our Outlet Management Division, the Group operates and
manages 67 coffeeshops and four industrial canteens under the
“Kimly” brand and a third party brand, and three food courts under
the “foodclique” brand.

With our proven and established track record as a food outlet operator,
we have been able to attract quality and anchor tenants with whom we
have forged strong longstanding relationships. As at the date of this
report, Kimly maintained a healthy occupancy rate of 97% for a total of
over 600 stalls within our managed food outlets.

Food Retail Division
Catering to a broad and varied customer base and supported by our
Central Kitchen, the Group’s 137 food stalls, two Tonkichi restaurants
and seven Rive Gauche confectionery shops under our Food Retail
portfolio comprises:

Our Central Kitchens supply sauces, marinades, pastries and semi-
finished food products to our Mixed Vegetable Rice, Seafood “Zi Char”,
Dim Sum stalls and Rive Gauche confectionary shops.

Outlet Investment Division
Outlet Investment Division is involved in investments
into properties (freehold and leasehold) in order to benefit from
rental income and/or capital growth. The Group has acquired five
coffeeshops, three industrial canteen units and a restaurant unit
during FY2020.

36
Mixed

Vegetable Rice

20
Rice

Garden

3
Teochew
Porridge

48
Dim
Sum

29
Seafood
“Zi Char”

1
Kanaaji Japanese

Tonkatsu
Food Stall

KIMLY LIMITED002

2
Tonkichi

Restaurants

7
Rive Gauche

Confectionery
Shops

003Annual Report 2020

Our Network

Our Extensive Network
The Group has an extensive network of 83 food outlets located across the
heartlands of Singapore, with its food stalls/restaurants/patisseries serving a
variety of dishes catering to consumers’ diverse preferences. 52 out of 83 food
outlets are open 24 hours.

West

24
Food Outlets

49
Food Stalls

North

19
Food Outlets

29
Food Stalls/
Patisserie

South/
Central

19
Food Outlets

32
Food Stalls/
Restaurants/

Patisserie

East

21
Food Outlets

36
Food Stalls/
Patisserie

52
Out of 83 Food

Outlets Are
Open 24 Hours

83
Food Outlets

146
Foodstalls/

Restaurants/
Patisserie

West

North

South/Central

East

* Picture for illustration purposes only.
# Outlets ceased to re-allocate resources for higher value of return.

Existing

New

Rationalised
#

20 Mar 2017
Successfully listed on the
Catalist of the SGX-ST

2017
2018

2019

30 Sep 2017
Completed HQ & central
kitchen annex block’s
expansion project

3 Jul 2017
Acquisition of operating leases &
business operations of Bedok 631
coffeeshop, 21 Woodlands Close
industrial canteen

2 Jul 2018
Commenced operations with
the first digitalised tray
return & rewards system
at Bukit Batok 292 coffeeshop

1 Jul 2019
Successfully tendered for
3 HDB coffeeshops under HDB’s
Price-Quality-Method (“PQM”)

1 Jul 2018
Acquisition of Tonkichi &
Rive Gauche Patisserie

1 May 2019
Launch of beverage
line “HOLIM”

1 Aug 2019
Successfully launched the
iconic Kimly Bak Kwa Bao

Remembering the Past

83 fo
od

ou
tle

ts i
n 2

020We g
rew

from
64 fo

od o
utlet

s in 2
017 t

o

005Annual Report 2020

Message to Shareholders

DEAR SHAREHOLDERS
On behalf of the Board of Directors (the “Board”), I am pleased to share our results
for the financial year ended 30 September 2020 (“FY2020”). This is the fourth
year of our reporting as a listed company, and we are proud to have achieved
sustainable healthy growth amid a turbulent environment for the year.

The onset of the COVID-19 pandemic at the start of the year certainly presented
challenges to the economic environment in Singapore. While the Group’s
coffeeshops, industrial canteens and food courts remained in operation during
the Circuit Breaker period from April to June, they were limited to only takeaway
and delivery services, resulting in a drop in footfall.

Despite these challenges, management will continue to pursue opportunities
to enhance shareholders’ value. We understand that it is currently difficult to
predict how long the situation in Singapore would take to normalise given the
lingering uncertainties surrounding the pandemic. Nonetheless, we will continue
to monitor the situation closely and respond resolutely.

Staying Nimble Through An Uncertain Environment
During these uncertain and volatile times, the Group harnessed on our
competitive advantages, the ability to act fast to adapt to the changing landscape,
and demonstrated resilient performance.

Message to Shareholders

Our recently upgraded central kitchen was
imperative in allowing us to boost profits and
mitigate adverse impacts from the pandemic. Our
food retail division received much support from
the central kitchen which enabled us to continue
catering to our broad and varied customer base
even during this challenging period. During
the three-month Circuit Breaker period, the
continued supply of raw materials became a
concern. However, we managed to stock-up on
essential raw materials such as meat, poultry and
seafood in our central kitchen. We also established
alternative sources for these raw materials to
improve on our supply chain resilience. Our
manufacturing capabilities in the central kitchen
also meant that we were able to produce large
amounts of food and as such, reduce the cost
of these materials by making bulk purchases. At
the same time, given that manpower onsite had
to be reduced due to social distancing measures,
our central kitchen managed to further assist
us in reducing manpower reliance at the food
stalls. This has proven that the central kitchen is
a unique and key factor in providing resilience
along with innovation to our operations.

While our drink stall business was affected the
most during this period, our food retail division
such as our Dim Sum, Seafood “Zi Char” and
Mixed Vegetable Rice stalls were able to partially
mitigate the impact on the revenue. This has
proven to us that having strong and diversified
revenue streams is extremely important, because
even though our different food retail divisions
may be affected in different ways, they are still
able to complement each other in times of crisis.

Our coffeeshops are mostly located within HDB
heartlands and these outlets saw an increase in
footfall due to the increased number of people
working from home and following the lifting of
dine-in restrictions at F&B establishments since
19 June 2020. In addition, an increase in domestic
consumption and surge in demand for our
services was also observed with the closure of
international borders. The convenient locations
of our food outlets, along with the availability of
more economical dining options, have provided
resilience to the Group’s revenue.

Moving forward, we are confident that
coffeeshops will remain an integral and unique
part of a flourishing cultural scene in Singapore.
They are considered part of the national identity
and intangible cultural heritage of Singapore, and
more practically, coffeeshops are community
dining halls that support community bonding
and social interactions. As such, we believe
that people will still opt for food in coffeeshops
despite the changing norms to order food online.

Tiding Through COVID-19
COVID-19 has accelerated the push towards
digitalisation and resulted in changes in consumer
lifestyle and preferences1. As such, we have also
increased our capabilities to stay relevant to seize
opportunities and emerge victorious as we move
into a post COVID-19 world.

Note
1 h t t p s : / / w w w . m c k i n s e y . c o m / ~ / m e d i a / m c k i n s e y /

industries/retail/our%20insights/how%20covid%20
19%20is%20changing%20consumer%20behavior%20
now%20and%20forever/how-covid-19-ischanging-
consumer-behaviornow-and-forever.pdf

During these uncertain and
volatile times, the Group

harnessed on our competitive
advantages, the ability to act
fast to adapt to the changing
landscape, and demonstrated

resilient performance.

KIMLY LIMITED006

007Annual Report 2020

During the Circuit Breaker period, we realised that
this was the perfect time to seize the increasing
business opportunities stemming from the rapid
growth of technology, and we accelerated our
digitalisation efforts by engaging more third-
party food delivery platforms such as GrabFood,
Deliveroo, and Foodpanda. Our central kitchen
also collaborated with Singapore Institute of
Technology in the areas of food technology
to maintain the quality of the food delivered,
considering the extra time required for deliveries.
The central kitchen continues to assist the food
retail division with its R&D and food processing
efforts, allowing the food retail division to create
new products and food concepts that would suit
the ever-changing demands of consumers, while
reducing the emphasis on manpower reliance.
We have also noticed a lack of staple food
offerings on the food delivery platforms and have
signed-up all our Mixed Vegetable Rice food stalls
on these platforms to capture the demand for
staple food.

Currently, we have more than 125 food stalls
offering food delivery services on the three (3)
major food delivery platforms as compared to
66 food stalls prior to the Circuit Breaker period.
Partnering with these food delivery platforms
has proven to be successful, as the work-from-
home directive has created demand for our
offerings, leading to an increase in revenue from
the online food delivery. The negative impacts of
COVID-19 has also been mitigated to an extent
by the increase in revenue from food deliveries.
This has also demonstrated the nimbleness of
the management team and the capabilities of
the central kitchen in adapting quickly in times of
crisis by building up the Group’s online presence.

Moving forward, we will continue to work with
these food delivery platforms on new promotions
and initiatives to further enhance the Group’s
revenue from delivery services and takeaways.

Increased Digitalisation
Against an uncertain environment and changing
consumer lifestyle and preferences, the Group is
constantly evolving and reviewing its strategy to
remain competitive and deliver higher value to all
our stakeholders.

Our traditional brick-and-mortar operations are
now being complemented by online channels
such as social media mass communications,
central kitchen’s quality control/ product R&Ds,
economics of scales and younger operating
talents.

As Dim Sum sales continue to grow, we have also
implemented several technology-driven initiatives
to enhance our Dim Sum sales and production
processes. Such initiatives include the Point of
Sales (“POS”) system and Enterprise Resource
Planning (“ERP”) system integration that allow for
real-time data accuracy and visibility of the whole
operations including sales and stock levels.

To cater to the increasing preference for
convenient cashless payment methods, cashless
payment options have been first introduced at
our food stalls located at Block 292 Bukit Batok
East Avenue 6, National University of Singapore
(“U-Town”) and Block 651 Jurong West St. 61. The
Group is also currently working with Infocomm
Media Development Authority (“IMDA”) and NETS,
with the deployment of the unified e-payment
systems2 to the rest of the more than 220
operating points across the island, which are
slated to be completed in 2021.

Note
2 Enterprise Singapore, together with HDB, JTC Corporation

and The National Environment Agency (“NEA”), officially
launched the unified e-payment initiative with NETS
as the appointed master acquirer in June 2019. The
Government will prioritise the deployment of SGQRs for
contactless payments. Through the SGQR, stallholders,
customers will be able to transact through up to 19
different providers, including Dash, GrabPay and local
bank offerings such as OCBC Pay Anyone and DBS
PayLah!. This will allow businesses to operate safely by
reducing contact with customers and minimising the
physical handling of cash during transactions.

KIMLY LIMITED008

Message to Shareholders

Going forward, we intend to continue engaging
our customers more actively via social media
platforms as well as leveraging on our Group’s
multi-concept food retail division to increase our
customer stickiness and eventually boost our
revenue.

Mergers and Acquisitions Journey
The Group has started to embark on the journey
of obtaining more direct asset ownership of the
food outlets since last year in view of the limited
supply of coffeeshop properties. With the team’s
relentless effort and determination, the Group
has achieved a remarkable acquisition track
record during the year.

Since IPO, the Group has been actively expanding
its footprints especially in areas where we do
not have a presence by acquiring food outlets in
strategic locations. On average, the Group has
been able to secure the leases between 3 to 5 new
outlet locations each year. Notwithstanding the
limited existing supply of coffeeshop properties,
the Group has accelerated its pace in acquiring
food outlets and continued to showcase its
established track record in acquiring new outlet
locations.

The Group has acquired a total of nine food outlet
properties which includes five coffeeshops, three
industrial canteen units and a restaurant unit for
an aggregate consideration of S$69.815 million
in FY2020. The acquisition allows the Group
to secure the long-term right-of-use of these
properties to expand and grow our network of
food outlets through this acquisition, given the
limited supply of long-term leasehold coffeeshop
properties for sale or lease. In addition, the

Group has also acquired a 25% partnership
interest in North View Investments LLP, owner
of a popular food outlet located at Yishun. This
outlet is located at a prime location with high
footfall expected in the future due to upcoming
residential developments in the vicinity. Long-
term leasehold coffeeshop properties have
become increasingly scarce in supply and by
acquiring a 25% partnership interest, the Group
is able to entrench its operating rights of the
coffeeshop as the Group will be entitled to first
rights of refusal in the event of lease renewal or
sale of the food outlet.

Furthermore, the Group has entered into three
joint venture agreements with third parties
to operate and manage the short-term HDB
coffeeshop leases at Block 376 Bukit Batok Street
31 #01-126, Block 1 Upper Aljunied Lane #01-02
and Block 429A Choa Chu Kang Avenue 4 #01-
01. This is in line with our strategy to expand
our network of food outlets in Singapore and
to establish new food outlets and food stalls as
and when suitable strategic locations become
available.

Following acquisitions during the year, our
portfolio has expanded to 83 food outlets and
137 food stalls, representing an increase of 29.7%
and 13.2% respectively, since our IPO. This marks
a significant milestone to the Group since our
listing.

Our traditional brick-and-
mortar operations are now

being complemented by online
channels such as social media
mass communications, central

kitchen’s quality control/
product R&Ds, economics of

scales and younger operating
talents.

009Annual Report 2020

These acquisitions allow the Group to diversify
and expand our revenue stream through
additional and recurrent rental streams, which
mitigates the uncertainties surrounding its private
leases, which can be influenced by expectations
from landlords and market competition. We
will continue to build on this momentum by
proactively looking for opportunities to acquire
food outlet properties in the heartlands of
Singapore to deepen our market presence and
to expand our outreach through online delivery
platforms.

Forward Strategy
We believe there is an abundance of opportunities
for growth in the F&B industry. Thus, we have been
proactively looking for business opportunities
which would allow us to expand both vertically
and horizontally.

The Group had entered into a joint venture
with Tenderfresh Fried & BBQ Chicken Pte Ltd
(“Tenderfresh”), a leading and established western
food operator and a major Halal food retailer,
supplier and wholesaler, to operate a Halal-
themed coffeeshop, with each holding a stake
of 51% and 49% respectively. The coffeeshop,
branded as KEDAI KOPI, underwent enhancement
work and was re-opened for business on 28
December 2020.

Leveraging on Singapore’s reputation as a globally-
recognised Halal food hub and as a gateway to more
than 350 million Muslims in South East Asia3, this is
an opportune time for the Group to make a foray
into the Halal industry to ride on the surging trend
and to capitalise on a market where around 14% of
the local population are Muslims, which equates to
about 789,000 people in the local community4.

The joint venture is an expansion of the Group’s
core business to another promising food sector.
In addition, by leveraging on Tenderfresh’s
competitive edge and wide network in
Singapore’s Halal F&B market, the joint venture
with Tenderfresh provides a valuable strategic
platform for the Group to further expand its
customer base as well as product offerings.

We believe that the trend of working from home
is here to stay, which would therefore add footfall
to the coffeeshops and lead to a continued
increased demand for our services. As Singapore
has gradually started re-opening its economy in
phases, we are also cautiously optimistic that
Kimly is well-poised to ride on this positive trend
which would add footfall to our coffeeshops.

Besides striving to grow inorganically, we
also remain committed to further expand our
business organically by expanding our product
offerings, updating our menu constantly based
on the evolving consumers’ preferences as well
as increasing our operations efficiency.

Note
3 An Overview of Halal Industry in Singapore https://

www.researchgate.net/publication/281272919_An_
Overview_of_Halal_Industry_in_Singapore

4 Singapore Demographics Profile 2019 https://www.

indexmundi.com/singapore/demographics_profile.html

Net Attributable Profit

S$25.2m
2019: S$20.1m

Revenue

S$210.8m
2019: S$208.3m

FY2020 FY2020

KIMLY LIMITED010

Financial Performance
For FY2020, we registered a 25.8% jump in net
attributable profit to S$25.2 million from S$20.1
million in FY2019 despite the tough business
environment. Gross profit margin increased to
26.8% in FY2020 from 19.5% in FY2019, due to
the government’s multiple COVID-19 assistance
schemes that have helped to mitigate parts of the
negative impacts from the pandemic. Revenue
was registered at S$210.8 million, a growth of
1.2% from S$208.3 million, mainly due to increase
in contribution from the Food Retail Division by
S$7.2 million. This increase was due to the rise
of food delivery sales, attributed by the Group’s
stronger online food delivery presence with
increased marketing efforts, coupled with the R&D
and production capabilities of the central kitchen,
translating to operational enhancement through
the challenging year. In addition, the heightened
food delivery demand during the Circuit Breaker
period has further driven sales with the Group’s
newly diversified Outlet Investment
Division. The strategically acquired outlets have
further expanded our footprint in Singapore,
catering to more consumers for both online and
physical stores. Gross profit in FY2020 grew by
38.9% to S$56.5 million from S$40.7 million in
FY2019. The increase in gross profit was offset
by higher selling and distribution expenses, and
administrative expenses which lowered profit
before tax to S$29.7 million.

Our balance sheet remains healthy. The Group
generated operating cash flow of S$74.9 million
with cash and cash equivalents as of 30 September
2020 at S$68.3 million. As at the date of this report,
the Group had utilised S$37.0 million of its IPO net
proceeds resulting in a balance of S$6.5 million.

Rewarding Shareholders
In appreciation of the unwavering support from
our shareholders, the Board is recommending a
final one-tier tax-exempt cash dividend of 0.84
Singapore cent per share. Taking into account
the interim dividend of 0.28 Singapore cent
per share paid in July 2020, the proposed total
dividend for FY2020 is 1.12 Singapore cents per
share, representing a payout of 52.6% of the
Group’s net attributable profit for FY2020. The
final dividend is subject to shareholders’ approval
at the forthcoming annual general meeting on 26
January 2021.

With Gratitude
On behalf of the Board of Directors, I would like
to express my most sincere appreciation to our
team for their contribution to our growth. I would
also like to thank our shareholders for putting
their trust in us, as well as our business partners,
landlords, food stall operators, associates,
customers and suppliers for their continued
support and trust.

I would also like to express my gratitude to the
Singapore Government for the various grants
and support that have been given to the food
and beverage industry during these tough times.
These grants have provided us with the chance
to expand our services, such as through engaging
more food delivery platforms, mitigate the cost
of lower footfall arising from social distancing
measures, along with maintaining the morale and
livelihood of our staff.

Our achievements today would also not have
been possible without the hard work, loyalty and
commitment of our staff and management team.
I would like to sincerely thank them for walking
this journey with me to build a growing and
sustainable business at Kimly.

Last but not least, we certainly could not have
come so far in our journey without all of you. We
look forward to your continued support as we
work to bring Kimly to greater heights.

LIM HEE LIAT
Executive Chairman

Message to Shareholders

The Group has started to
embark on the journey of

obtaining more direct asset
ownership of the food outlets
since last year in view of the
limited supply of coffeeshop

properties.

011Annual Report 2020

给股东给股东的信息的信息

致各位股东

我 谨 代 表 董 事 会 ， 向 各 位 提 呈 我 们 截 至 2 0 2 0 年 9 月 3 0 日 财 政 年 度
（“2020财年”）的业绩。这是我们上市后提呈报告的第四年。在这一
年动荡的环境下，我们仍能实现可持续的健康增长,我们为此感到自
豪。

今年年初2019冠状病毒病（“COVID-19”）的爆发，为新加坡的经济
环境带来了诸多挑战。虽然集团的咖啡店，食堂和美食广场在4月至6
月的阻断措施期间仍继续营业，但仅限于打包和外卖服务，进而导致
人流量下降。

尽管面临种种挑战，管理层仍将继续寻求商机，来提高股东们的价
值。由于疫情增添了许多不确定性，因此目前也很难预测新加坡的经
济将需要多长时间，才能够复苏。尽管如此，我们将继续密切观察局
势，并作出相对的对策。

在这段不确定和动荡的时期里，集团充分的利用了自身的独特竞争优
势，敏锐的行动的能力，以适应不断变化的局势和充分地体现出有韧
性的表现。

KIMLY LIMITED012

…