KFP.N0000(Keels Food Products PLC)

[yellow knifeTop contributor]

Food and Beverage Industry had a very good time in past three quarters . One fascinating fact of Sri Lankan F&B industry its shares often remain over valued. Even during this down turn KFP price has reached Rs 199.30 as at 11th Dec 2015 where its price chart shows that there were many good years to collect this share at a better price . CCS, HARI, BFL, LION, Nestle, all remain very much over valued and KFP was within the reach during past past year.

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[yellow knifeTop contributor]

Revenue of the company was slowly growing and FMCG wave of this year will reflect positively in 2016.

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[yellow knifeTop contributor]

Company use to pay attractive dividends.. and can expect good dividends in next year as well

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[yellow knifeTop contributor]

2014 was a very good year to collect this share as it was trading below net asset value. F&B industry in Sri Lanka very rarely provide such opportunities where Market value is below net asset value..

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[yellow knifeTop contributor]

It seems our consumers drink more than eat. ( Just a comparison of FMCG figures than a real fact)

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[yellow knifeTop contributor]

The demand for processed meat seems to less than meat.


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[yellow knifeTop contributor]

Unlike some other industries like Motor vehicles, Food and Beverage is not volatile. The revenue is continoulsy inclining .

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[chutiputhaTop contributor]

Thank U Very Much for Sharing this Sir..+++++ for ur hard work..

[dhanurrox]

Yellow knife you can highlight CCS experience also.We'll see 300 from KFP next year.That's certain to me.

[lanka]

Thanks dear yk

[yellow knifeTop contributor]

I received KFP annual report today. So I can include the charts with 2015/2016 figures.

2015/16 was a very good year for the company.

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[yellow knifeTop contributor]

Company paid a dividend which was the highest in last ten years.

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 (Even though I quote Dividends from Annual report, I find the real dividends were slightly higher than mentioned above.)

[yellow knifeTop contributor]

Debt to Equity ratio is taken down to low levels indicating the possibility of future dividends..

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[yellow knifeTop contributor]

When compared with Net Assets Value, the market value may be corrected in near future.


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[yellow knifeTop contributor]

Like to see the views of a technical analysis on Market Price. It seems it has grown than expected and awaiting a correction.

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[yellow knifeTop contributor]

Out of total revenue what has become net profit. This net profit margin is higher in Hydro Power projects and Palm Oil plantations. Yet in F&B it has taken a nominal value.

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[guruji]

You mean it is over valued counter to collect now plesse advice

[yellow knifeTop contributor]

Keels Food to resume exports to India

March Quarter Profit Down

Leader in processed food manufacturing KFP, a unit of JKH is hoping to generate greater income from exporting its products in the 2016/17 financial year, as it plans to resume exports to India.

India's regulations with regard to point of entry changed 2 years ago , hindering exports. Now these restrictions are relaxed thus enabling exports again to India possible.

Efforts taken to export to India two years ago was unsuccessful due to certain non-tariff barriers relating to compliance procedures.

However March to March quarter reports show slow down of revenue by 11% , probably reflecting slowdown in consumption.

[yellow knifeTop contributor]

You  mean  it  is  over  valued  counter  to  collect  now  plesse  advice

EPS 13
Net Assets 69
Trading at 175.10

Q to Q profit  drop 11%

So its over valued. Yet listen to  experts....and this is just my view

My view is different as I collect at low and hold. To me these prices are too high. However F&B shares often trade at higher PE ratios and there are foreign buyers who select F&B at high values. Further Indian export may add positive impact to the share price.


Further dividend yield is attractive. 12/175= 6.8%

[Future123Active Member]

Thanks YK. What about the impact from VAT increase and NBT? Were they paying VAT and NBT before?

Certainly the export to India is a boost to KFP. The best part is the dividend yield. Dividend grows every year and hence deserves to trade at higher PE.
Eg: CCS, LLUB, NEST and CTC

[Danidu]

Hello Yellow knife, Thank you for the above post.

F&B sector PER is 18 and PBV is 4, when we look at PER of KFP is 13 and PBV is 2.5 which is lower than the sector and other good counter with D policy. it is performing well YoY, can expect same for future. Net Assets 69, because of the D/Y?

Thanks.

You  mean  it  is  over  valued  counter  to  collect  now  plesse  advice

EPS 13
Net Assets 69
Trading at 175.10

Q to Q profit  drop 11%

So its over valued. Yet listen to  experts....and this is just my view

My view is different as I collect at low and hold. To me these prices are too high. However F&B shares often trade at higher PE ratios and there are foreign buyers who select F&B at high values. Further Indian export may add positive impact to the share price.


Further dividend yield is attractive. 12/175= 6.8%

[yellow knifeTop contributor]

Thanks Danidu...

Yes F&B sector PE is always remaining higher. When we evaluate fundamentally with financial ratios no one can say its over valued.( except with Net Assets and why Net Assets grow slowly is as Danidu has explained above is due to paying higher dividends. )

Yet this is my concern.

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2015 was the year for F&B as government increased its expenditure by giving away amazing salary hikes and decreased its revenue by cutting taxes on commodities. This is due to the fact that the year was election based. Now government has to reverse its temporary merry measure. 2015 disposable income of the people was high. Once the tax is increased the disposable income will come down affecting F&B.

2015/16 was the best revenue increased( against the previous year ) year for KFP. Will it repeat in 2016/17?

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Regarding Indan factor.

Yes exporting to India will be a booster for the revenue of KFP.

However once I listenedd to Mr. Victor Hettigoda who described his failed attempt to export Siddalepa to India. It is not an easy task to export to India like importing from India. Let's see whether the policies of India has changed .

[yellow knifeTop contributor]

There are some similarities between BFL and KFP. Both are into Chicken though the latter is processed meat.

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One lucky note as per KFP annual report is that Sri Lanka has achieved self-sufficiency in chicken in 2014 with negligible amount of imports.

[yellow knifeTop contributor]

The Distribution channel of KFP is managed through loyal network of outlets where average length of relationship for the distributor is approximately 6 years  with over 265 having been engaged for more than 8 years. This supply chain managing has been helpful to reduce cost and the dealer network is precisely fitting to GDP contribution by provinces .

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[Danidu]

Dear Yellow Knife and others,

The KFP price has came down bit and what do you think about the price now? Can it go down more?

Thank you in advance.