Kimly Limited’s S\$11.8 Million Coffee Shop Acquisition: Strategic Property Play Set to Enhance Earnings Stability

Key Points from the Announcement

• Kimly Limited’s subsidiary, Kedai Kopi Pte. Ltd., has entered into a S\$11.8 million agreement to acquire 100% of GSPL Pte. Ltd., which owns the coffee shop property at 12 Haig Road, Singapore 430012.
• The acquisition secures ownership of a 2-storey HDB shophouse (level 1: coffee shop, level 2: 3-room HDB flat) with 82 years remaining leasehold and a 393 sqm strata floor area.
• Funding is through a mix of external bank financing (S\$5.8 million), shareholders’ loans (S\$5 million split in proportion to Kedai Kopi’s 51%/49% ownership), and internal resources (S\$1.36 million).
• The purchase consideration was determined based on independent market valuation (S\$12.2 million), slightly above the agreed price, supporting the deal’s rationale.
• The property has been operated by Kedai Kopi since April 2021, generating rental income for GSPL.
• GSPL’s unaudited net profit for the six months ended 31 March 2025 was S\$22,460.
• Pro forma financial impact on Kimly is neutral for NAV and NTA, but shows a marginal EPS uplift.
• No new directors or service contracts will be introduced in connection with the acquisition.

Details and Strategic Rationale Investors Must Know

Kimly Limited is doubling down on its outlet investment strategy with the acquisition of the Haig Road coffee shop property. This move secures the operational continuity of Kedai Kopi, which has run this location since April 2021. By shifting from tenant to owner, Kimly aims to mitigate leasing risks, ensure long-term stability, and unlock potential capital appreciation.

The property, valued independently at S\$12.2 million, is being acquired for S\$11.8 million plus S\$0.32 million in stamp duty, with funding structured to manage liquidity and shareholder interests. The financing mix includes a S\$5.8 million bank loan, S\$2.55 million shareholder loan from Kimly Makan Place (Kimly’s wholly owned subsidiary), and S\$2.45 million from SCK (2020) Pte. Ltd., which also holds a stake in Tenderfresh Group Pte. Ltd., a related entity. Both shareholder loans carry the same interest rate as the bank loan, are repayable on demand, and will be serviced from monthly surplus cashflow.

The acquisition is structured to avoid dilution, as no new shares are issued; all funding is via debt and internal resources. The transaction is classified as a “non-discloseable transaction” under SGX Catalist rules, as it does not breach key thresholds (aggregate consideration is 4.86% of Kimly’s market cap, far below the 75% major transaction mark).

Financial Impact and Shareholder Considerations

• Net Asset Value (NAV) and Net Tangible Assets (NTA): Both remain unchanged post-acquisition, at S\$183.26 million and S\$131.41 million respectively, equating to 14.73 cents and 10.57 cents per share.
• Earnings Per Share (EPS): Pro forma EPS rises marginally from 2.67 cents to 2.67 cents, based on FY2024 results. The net profit impact is minimal, as the operation was already consolidated; the effect comes from rental savings and the costs of financing/depreciation.
• Shareholder Approval: Not required, as the acquisition is in Kimly’s ordinary course of business following previous approval to diversify into property investments.
• Potential Price Sensitivity: This acquisition strengthens Kimly’s asset base and operational stability, which may appeal to investors seeking defensive plays. The strategic move away from leasing could be viewed positively in the context of Singapore’s competitive F&B landscape, and may enhance Kimly’s valuation over the longer term, especially if outlet investment transactions accelerate.
• Risk Factors: The primary risk is execution—ensuring the property delivers expected cashflows, and that financing costs remain manageable. Investors should monitor Kimly’s funding strategy and any future acquisitions that could aggregate to a “major transaction” under Catalist rules, potentially requiring shareholder approval.

Other Noteworthy Details

• The SPA and valuation report are available at Kimly’s registered office for three months.
• There are no conflicts of interest or new board appointments as a result of the acquisition.
• If Kimly’s outlet investment business reaches enough scale within the financial year, future deals could trigger major transaction status and require shareholder votes.

Conclusion

Kimly’s acquisition of the Haig Road coffee shop property is a strategic, potentially price-sensitive move that secures a key operating asset, supports long-term growth, and reinforces its property investment strategy. While the immediate financial impact is modest, the implications for asset security and future expansion are significant. Investors should watch for further acquisitions and monitor the evolving property portfolio, which could become a more material driver of earnings and valuation.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should consult their own professional advisors and review company disclosures before making investment decisions. The author has relied on public disclosures and company announcements; accuracy and completeness are not guaranteed.

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