MK shares end day higher than IPO on SET debut

The company plans to open more MK restaurants abroad to attain at least 10-per-cent revenue growth this year.      

Group president and chief executive officer Rit Thirakomen said he started this business with only one outlet, with all shares held by his small family. There is no need to sell off the existing shares after MK began trading on the bourse. The listing is to raise the operational standards of MK Restaurants and corporate governance. 

The Bt9.1 billion in capital from the listing of MK shares will help fund the construction of a new Bt1-billion central kitchen facility, a Bt320-million head office, new MK restaurants locally and abroad, and working capital to support future business opportunities.  

 

Central kitchen 

The new central kitchen facility on Bang Na-Trat Road will be able to support the addition of new restaurants when it is completed in October, Rit said. 

This year, MK hopes to generate revenue growth of at least 10 per cent, on par with annual growth rates in the past. The growth will come from the addition of new restaurants locally and overseas. The food business sector should continue to grow as evidenced by a considerable influx of new operators. However, new rivals will not affect MK’s expansion plans, Rit added. 

MK hopes to increase the number of restaurants to 400 in Thailand this year, but may have postpone the opening of some of them in accordance with the plans of the department stores and malls in which some MKs are located. Meanwhile, the company plans to add 25 more Yayoi Japanese restaurants, Rit said.  

As for overseas expansion, MK plans to tap the Asean markets first, starting in Indonesia next month in the form of a franchise and in Singapore in November. It hopes to expand into Myanmar next year. MK’s overseas business can take the form of a franchise, business alliance or joint venture, or mergers (at least 51-per-cent equity holding), depending on the investment laws of each country, Rit said.   

The company recorded revenue Bt7.05 billion in the first half of this year, up 10.84 per cent over the same period of 2012. However, net profit dropped 11 per cent to Bt966.77 million from the Bt1.09 billion seen in the first six months of last year. The drop was due to higher production costs, he said.

According to Kiatnakin Securities, MK Restaurant Group’s operating results should grow in line with the expansion of towns and cities. MK plans to add 65 new restaurants annually, equivalent to 10-15 per cent annual growth. MK should be in good position to tap business opportunities that arise under the Asean Economic Community.