5 things I learned from the 2019 Berjaya Food AGM

Berjaya Food Berhad owns Starbucks stores in Malaysia and Brunei, Kenny Rogers Roasters restaurants in Malaysia, and Jollibean stores in Singapore. It also sells canned and bottled Starbucks coffee and Joybean soy milk beverages for the retail market. In 2019, it owned a total of 407 stores.

I wondered how Berjaya Food was performing as there seems to be a Starbucks store at almost every corner of the Klang Valley. So I attended its most recent AGM to learn more.

Here are five things I learned from the 2019 Berjaya Food AGM:

1. Revenue increased 23.3% year-on-year from RM639.7 million in 2018 to RM789.0 million in 2019. The increase in revenue is due to higher contributions from Starbucks and an additional two months of operations as Berjaya Food changed its financial year end from 30 April to 30 June in order to coincide with its ultimate holding company, Berjaya Corporation Berhad. Starbucks recorded about 3% same-store sales growth in 2019 and opened 32 new stores in 2019. Same-store sales growth remained flat for Kenny Rogers Roasters and Jollibean in 2019. The total number of stores owned by Berjaya Food are as follows:

Number of stores (2018)Number of stores (2019)
Starbucks in Malaysia260291
Starbucks in Brunei44
Kenny Rogers Roasters in Malaysia8180
Jollibean in Singapore3132

2. Berjaya Food recorded a net profit excluding other income of RM15.2 million in 2019 compared to a net loss of RM5.2 million the previous year. Net profit mainly improved because of revenue growth. There was also a one-off loss arising from the disposal of an Indonesian subsidiary, PT Boga Lestari Sentosam of about RM12.3 million in 2018. Other receivables amounting to RM2.3 million was also impaired in 2018 as a result of this disposal. The impairment resulted from the outstanding balance owed by PT Boga Lestari Sentosa to Berjaya Food.

3. Kenny Rogers Roasters continued to record losses in 2019 because of additional expenses incurred from the closure of loss-making stores. In 2019, Berjaya Food opened eight new stores but closed nine. The operations are expected to turn profitable by Q3 2020. Ten new openings and three closures are planned for 2020.

4. Jollibean’s loss before tax tripled from S$244,000 in 2018 to S$750,000 in 2019 because Berjaya Food spent more money on store renovations and rebranding activities. The management estimated that the business will turn around in 2020. The brand is currently franchised in Singapore and the Philippines. Further franchising opportunities are being explored in Thailand and Vietnam.

5. Minority Shareholder Watch Group (MSWG) highlighted that total directors’ remuneration increased by 45.5% year-on-year to RM4.3 million in 2019. The board explained that the increase was mainly due to appointments of new directors at the operating level as well as the additional two months of operations in 2019.

Liked our analysis of this AGM? Click here to view a complete list of AGMs we’ve attended »

Shak Chee Hoi

Chee Hoi is an investor and research analyst at The Fifth Person. He was previously involved in wildlife conservation work with a non-governmental organisation as well as sustainability consultancy work. He personally believes in impacting society and the environment for the greater good.

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