Central Plaza Hotel PCL (CENTEL) said this week that its food subsidiary, Central Restaurants Group (CRG), had purchased Brown Dessert company’s ordinary shares for 70 million baht, holding 51 per cent of the total shares.
The purchase can be divided into 18,352 shares from the existing shareholders and 28,976 of capital increase shares.
Brown Dessert is a company established in February this year. The business is operated by producing and distributing food, desserts, bakery and beverages under the name “Brown Cafe.”
The main revenue comes from Brown Cafe in Thailand. There are currently 11 branches, but only one of the branches is operated under Franchise.
Brown Dessert also signed a management license agreement with the Brown Cafe operator in Malaysia.
Central Restaurants Group expects returns from Brown Dessert operations and plans to continue to expand its investment in the food business in line with the company’s strategy.
Central Restaurants
Central Plaza Hotel (CENTEL) is a part of the Central group. It operates a range of hotels and quick service restaurants in Thailand.
Their food business has operations in more than 1,064 outlets in Thailand, including KFC, Mister Donut, Auntie Anne’s and the Ootoya Japanese restaurant chain.
In 2019, they contributed to 42 per cent of the total revenue, while the hotel business contributed 58 per cent.
Analysts from KGI securities said that the major portion of revenue has relied on its food business. CENTEL’s earnings could outperform its local peers in the short-to-medium-term.
The company’s sales recovered to 18 per cent in July and the recovery is continuing through to 2021, backed by improved sentiment on the COVID-19 outbreak and strong growth in the delivery platform.
However, CENTEL’s shares dropped by 3.67 per cent to 26.25 baht per share or -1.00 baht on Tuesday afternoon (3:25 p.m.) with the transaction value of 44.3 million baht.
Yuanta securities said although CENTEL may have a loss of 861 million baht in 2020, there is an upside risk from the food sector with better-than-expected recovery coupled with effective cost reduction.
