La Kaffa International Co Ltd (六角國際事業), which operates five food and beverage brands in more than 20 nations, aims to accelerate the expansion of its directly operated stores this year by investing between NT$123 million and NT$142.5 million (US$4.01 million and US$4.64 million) in capital expenditure.
The expansion is expected to help raise the revenue generated by the company’s directly operated stores to more than 50 percent of its total consolidated sales at the end of this year, from 34.4 percent recorded in the first quarter of this year, a company official said at an investors’ conference.
La Kaffa spokesman James Lin (林照峰) said the company is to maintain a strategy of raising numbers of directly operated stores in Taiwan and would seek opportunities to cooperate with more individual agents in overseas expansion for higher royalty incomes.
The company also plans to launch up to 14 directly operated stores in Taiwan this year, including five bubble tea chain Chatime (日出茶太) stores, two bakery chain Bake Code (烘焙密碼) stores and seven Japanese pork chop restaurant chain Wagokoro Tonkatsu Anzu (銀座杏子日式豬排) stores — a joint operation with Japan’s ATOM Co — Lin said.
In addition, La Kaffa is scheduled to open a directly operated outlet in the US, located in Flushing, New York, Lin added.
“The two plans might boost the company’s annual capital expenditure to between NT$123 million and NT$142.5 billion this year,” Lin said.
Given fierce competition in Taiwan’s hand-shaken beverage chain store market, La Kaffa has decelerated the pace of its expansion of Chatime in Taiwan, while increasing the pace in Indonesia and Malaysia. The company operates its business as the sole distributor in both Indonesia and Malaysia, with the number of Chatime stores exceeding 100 in both nations.
With the rising contribution by direct operated stores, analysts expect the company to see its consolidated sales, which totaled NT$1.41 billion last year, to post 30 percent growth this year.
The company reported a net profit of NT$134 million last year, down 0.37 percent from 2013, with earnings per share of NT$5.04.
In the first quarter of this year, La Kaffa posted a net profit of NT$30.83 million, or NT$1.19 per share. That was higher than the NT$22.32 million, or NT$0.95 per share, the company made a year earlier, the company said in a statement.
Consolidated sales last quarter rose 28 percent from a year earlier to NT$371.72 million, the statement added.
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