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Kimly to develop own brand of coffee and teas amid ongoing MAS, CAD probe

The coffeeshop operator has plans to develop their own brand of coffee and teas and is open to acquisitions and strategic alliances.

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Kimly Limited
Source: Kimly Limited

Mainboard-listed coffeeshop operator Kimly Limited has plans to develop their own brand of coffee and teas and is open to acquisitions and strategic alliances, the group said on Tuesday. The announcement comes amid an investigation on the firm from Singapore authorities on an acquisition it had made earlier in the year.

The group has created a workgroup to study the formulation and packaging of Kimly’s own brand of Iced ‘Kopi’ and ‘Teh’ for sale at its drink stalls, and has plans to launch this brand of beverages between January and March of next year.

The move will provide further growth for its drinks revenue, Kimly said. Other than new strategies, the group will also continue to “explore suitable opportunities to grow its business through acquisitions, joint ventures and form strategic alliances with parties who can help the group strengthen its market position,” whilst continuing to deliver sustainable and steady returns to its shareholders, it said.

The firm’s group revenue for financial year of 2018 increased by 5.3% to an all-time high of S$202.2 million. Net profit for the same period rose 2.1% from a year ago to S$21.9 million.

Kimly said it has been able to acquire 3 to 5 new food outlet locations every year, and expects to operate about 70 coffee shops and food courts in Singapore by the end of the financial year ending September 30, 2019.

The coffeeshop operator claims it is currently one of the largest operators of traditional coffee shops in Singapore, operating and managing a total of 67 food outlets, comprising 60 coffee shops, 4 industrial canteens and 3 food courts.

Kimly open to acquisitions, joint ventures, amid regulatory probe

Earlier this month, the company’s Executive Chairman Lim Hee Liat and Executive Director Chia Cher Khiang were arrested by Singapore’s Commercial Affairs Department (CAD) as they were suspected of providing false or misleading statements prohibited under the Securities and Futures Act.

In November, the CAD and Monetary Authority of Singapore (MAS) had requested for documents related to the purchase of drinks company Asian Story Corporation (ASC). Kimly had bought the company for S$16 million in July from a former Pokka Corp employee Wang Chia Ye, but subsequently cancelled the purchase.

Kimly cancelled the purchase after considering the impact of Pokka Corp terminating a manufacturing agreement with ASC.

Kimly shares were unchanged at S$0.24 on Tuesday morning.

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