Dairy Farm's biggest hypermart division under threat

Cost pressures were present year-round.

It has been a challenging year for Dairy Farm, but the F&B giant has proven its stable footing in the industry.

According to a report by RHB, Dairy Farm’s FY14 recurring profit grew 4% YoY, on a revenue growth of 6% YoY. Its overall performance was mixed, with operating profit declining substantially (9%YoY) in its biggest supermarket/hypermart division, while other units–in particular Health and Beauty (up 11% YoY)–recorded growth. It maintained a dividend of 23 US cents/share for the full-year.

During the year, all its businesses experienced cost pressures. The company was unable to mitigate this fully, particularly in Indonesia and Singapore, where we believe its sales trends were tracking lower than its respective peers.

Here’s more from RHB:

Management has taken active steps to improve this, with a revamping of its Cold Storage supermarkets in Singapore and changing the country management team for Indonesia.

Its Hong Kong and China operations were strong performers for the group in 2014.

CEO Mr Graham Allan continues to drive the initiative in improving organisation-wide business synergies. This includes ongoing investments to standardise its back-end supply chains and IT systems, while customising each market’s retail and brand offering to cater to local consumers.