This article was written with reference to Kimly Limited's press release and financial statements publicly available at SGX Announcements.
If you live in Singapore, you know the realities of the local Food & Beverage (F&B) scene right now. Rents are punishing, manpower is scarce, raw ingredient costs are stubbornly high, and consumers are tightening their belts.
Let's crack open Kimly Limited's income statements, balance sheet and cash flow statements to see how our heartlands coffee shop operator is quietly fortifying its business.
Flat Revenue, Fatter Margins
At first glance, Kimly's growth looks completely stalled. Total revenue inched up just by 0.9% to $322.1 million. If you stop reading there, you might assume the business is struggling. But the real story is found a few lines down.
Despite the inflationary environment, Kimly actually managed to decrease its cost of sales by 0.3% to $228.1 million.
How did Kimly make more money while spending less? A shift in the business mix. Revenue from food retail (direct selling) dropped by $2.2 million. Kimly aggressively pruned the dead weight, closing 14 underperforming food stalls and a restaurant over the last two years.
Revenue from outlet management (landlord/ operator) jumped by $4.5 million. Instead of just selling food, Kimly is making more money from acting as the master leaseholder, managing the properties, and providing cleaning and utility services.
By cutting unprofitable stalls and leaning into outlet management, overall Gross Profit increased by 3.8% to $94.1 million, and Gross Margin expanded from 28.4% to 29.2%. They are squeezing more profit out of every dollar earned.
Balance Sheet, Negative Working Capital?
Kimly reported a Net Current Liabilities position (negative working capital) of $3.2 million. Does this mean Kimly is going bankrupt and can't pay its bills? Absolutely not. This is a typical accounting illusion caused by the way leases are recorded on the balance sheet.
Kimly’s current liabilities include $38.9 million in "Lease Liabilities". In plain English, this is just the rent they owe landlords for the next 12 months, which they will easily pay out of their daily operating cash flow. If you strip out this accounting quirk, Kimly actually has a highly healthy positive working capital of $35.7 million.
Cash Flows As Tenant And Landlord
I like measuring company health in cash, and Kimly is a cash-generating machine. They generated a massive $85.3 million in net cash from operating activities in FY2025
Kimly used cash to aggressively accumulate assets in FY2025. Cash on the balance sheet dropped from $98.5 million down to $68.1 million. Why?
Because Kimly spent $30.0 million buying their own property, plant, and equipment. Specifically, they had spent $24.1 million to fully acquire coffee shop properties in Serangoon Central and Yishun Ring Road.
They also used their cash pile to aggressively pay down $11.4 million in bank loans
Kimly is using its cash to slowly transition from being a renter vulnerable to landlord price hikes, to owning the freehold and long-leasehold properties themselves. They also announced another $11.8 million coffee shop acquisition at Haig Road right after the financial year ended.
The Dividends
For dividend investors, management is maintaining a highly reliable payout. They proposed a final dividend of 1.00 cent, keeping the total FY2025 dividend flat at 2.00 cents per share. That represents a 75% payout ratio, perfectly balancing the need to reward shareholders while retaining enough cash to keep buying up prime heartland coffee shops.
Churning And Scaling
To understand how Kimly is protecting its margins, we have to look at the sheer scale of its operations and its willingness to "churn" its assets.
As of this report, Kimly operates a massive network: 89 food outlets, 180 food stalls, 11 Tonkichi and Tenderfresh restaurants, and 4 Tenderfresh kiosks across Singapore's heartlands. They also run a Central Kitchen that supplies sauces, marinades, and semi-finished products to their stalls, heavily buffering them against external supply chain shocks.
But scale was not an excuse for complacency. In the Food Retail division, Kimly demonstrated focus on profitability. Over the last two years, they closed 14 underperforming food stalls and one restaurant. In that same timeframe, they opened 24 brand new stalls and outlets, showing fruits of renewal and recycling capital. This isn't a company resting on its laurels, Kimly is actively pruning dead branches to ensure the rest of the tree can thrive.
Kimly's 2026 Playbook
In their press release, Kimly's management explicitly acknowledged that consumers have become highly price-sensitive due to rising living costs and geopolitical tensions. They also highlighted the ongoing squeeze of strict foreign worker policies and manpower shortages.
Management stated their core focus is to establish new outlets in "strategic, high foot traffic locations within mature estates". We are already seeing this execution in real-time. Beyond the outright acquisitions in Serangoon Central and Yishun Ring Road, they have:
- Entered a joint venture to manage a short-term HDB lease for a coffee shop at Block 206 Toa Payoh North.
- Signed a share purchase agreement (post-FY2025) to acquire another coffee shop at 12 Haig Road.
By buying up the physical coffee shops in mature, densely populated HDB estates, Kimly is securing captive audiences that require daily, affordable meals, regardless of what the broader macro economy is doing.
Conclusion
Kimly is one of few publicly listed companies for investors giving direct exposure to coffee shop and food court business in Singapore. I consider this a recession-proof investment due to the simple fact that consuming affordable hawker food is a way of life for many people here. All Huat!!
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