Kimly's 1H 2026 Results: Coffee Shop Giant Keeps Compounding Profits

This article was written with reference to Kimly Limited's 1H FY2026 press release and financial statements publicly available via SGX Announcements, released on 12 May 2026.

If you’ve stepped into a neighborhood hawker center or coffee shop recently, you know the Singapore F&B narrative hasn't gotten any easier. Inflation remains sticky, energy market volatility is driving up utility and supply costs, foreign worker policies remain tight, and Progressive Wage Model (PWM) adjustments continue to push up headcount expenses.

In our look back at Kimly’s FY2025 results, we highlighted how Kimly was quietly fortifying its business by pruning dead weight and transitioning from a mere tenant into a property-owning landlord.

With their 1H FY2026 earnings (for the half-year ended 31 March 2026), we can look at how the strategy is bearing fruit. Let’s dive into the numbers to see how Kimly is continuing to extract higher profits despite macro headwinds.

Revenue Crawled, Profit Jumped

Similar to what we saw in FY2025, Kimly’s top-line revenue growth appears modest at first glance, growing 1.3% year-on-year to $161.4 million.

The income statement tells a much better story:

• Gross Profit rose 4.2% year-on-year to $45.6 million, with Gross Profit Margin expanding by 0.8 percentage points to 28.3%.
• Net Profit After Tax (NPAT) rose 10.6% year-on-year to $16.4 million (up from $14.8 million in 1H FY2025).

We can see that Kimly's profits grew by double digits on just 1.3% revenue growth. This comes down to disciplined segment management and targeted government support.

Segment Management: Pruning Stalls and Growing Asset Footprints

Kimly’s three business segments reveal how management is actively shifting its profit engines:

1. Food Retail (Direct Selling): Revenue dipped slightly by $0.7 million to $89.8 million. Kimly continued its aggressive capital recycling, closing 7 underperforming stalls in 1H FY2026 (following 8 closures in FY2025) while opening 8 new stalls in higher-potential spots.
2. Outlet Management (Master Lease/Operations): Revenue grew to $66.5 million (up from $65.2 million), bolstered by contributions from newly opened coffee shops and expanded cleaning services.
3. Outlet Investment Business (Property Ownership): Revenue surged to $5.1 million (up from $3.5 million in 1H FY2025). This was driven by new property acquisitions moving onto the balance sheet. Notably, following the completion of the acquisition of 12 Haig Road, its Halal coffee shop concept (Kedai Kopi) was officially reclassified from Outlet Management into Outlet Investment.

Cost of sales crept up by just $0.2 million to $115.7 million. While salary adjustments under the Progressive Wage Model and higher headcount added cost pressures, this was heavily offset by $2.2 million in Progressive Wage Credits received during the period (which were received in 2H during FY2025).

Cash Flow, Balance Sheet

Kimly remains an absolute cash-generating machine, generating $41.2 million in net cash from operating activities for the half-year (up from $36.6 million in 1H FY2025).

Its cash pile sits at a comfortable $65.1 million as of 31 March 2026.

Why is this cash buffer so important? It allows Kimly to execute its core strategy: buying up high-footfall HDB coffee shop properties to permanently eliminate rental risk.

• 12 Haig Road Acquisition: On 9 January 2026, Kimly officially completed the purchase of the 12 Haig Road property. Owning the underlying real estate for its Kedai Kopi outlet mitigates long-term lease renewal risks and locks in operational stability. 

• Network Expansion: In 1H FY2026 alone, Kimly added 3 new coffee shops (110 Yishun Ring Road, Blk 10 Tuas Avenue 3, and Blk 587 Pasir Ris Drive 3) alongside 8 new food stalls.

Verdict: Scale and Resilience Going Against Headwinds

Kimly’s ability to protect its margins against headwinds facing the F&B sector comes down to these three key facts.

1. Asset Moat: Kimly has been systematically acquiring the underlying HDB coffee shop properties (such as the recent completion of 12 Haig Road). By owning its real estate, Kimly permanently eliminates lease renewal spikes and earns stable rental income from third-party stall tenants in its Outlet Investment segment.
2. Disciplined Pruning: Kimly prioritizes margin defense over top-line expansion. In 1H FY2026, Kimly closed 7 underperforming food stalls (after closing 8 in FY2025) and reallocated staff and capital to higher-traffic locations. This kept its cost of sales nearly flat (+0.2% YoY) despite sticky inflation and Progressive Wage Model (PWM) wage increases.
3. Operating Leverage: Kimly’s massive scale (over 80+ coffee shops and 140+ stalls) gives it substantial bulk-buying power across food ingredients and utilities. Its operating expenses dropped slightly or remained tightly controlled across its core divisions

In a tough F&B environment plagued by rising wages and supply costs, Kimly is demonstrating why structural real estate ownership matters. 

At a share price of ~S$0.395, Kimly trades at a reasonable Price-to-Earnings (P/E) multiple of ~14.0x while offering a defensive ~5.06% dividend yield based on an annual payout of 2cts per share. It was reported this week that Kimly is seeking mainboard listing, which could improve access to capital and trigger a revaluation of the stock in times to come. All Huat !!