On 7 February 2025, Fraser and Neave Limited (“F&N”) announced their first quarter business update for FY2025. F&N seems to be off with a strong start for FY2025, with its financial performance being notably better than the previous quarters. Despite the stronger performance, F&N continues to trade at a discount to book value. This provides investors a buffer and a good candidate for potential privatization. On that matter, there have been no new updates since the completion of the proposed share swap between Thai Beverage Public Co Ltd (“ThaiBev”) and TCC Assets Limited (“TCCAL”).
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: General Announcement::1Q2025 Voluntary Business Updates (Unaudited)
Financial Highlights
Revenue
| Metrics | Current | Previous |
|---|---|---|
| Revenue | +16.3% | +3.0% |
| Rating | Favorable | Favorable |
Revenue for the first quarter of FY2025 has increased by 16.3% to SGD618 million from SGD531 million for the same period in the previous financial year. The increase was mainly due to F&B segment growing by 19%, driving the Group topline performance. This was offset by P&P’s revenue which was largely impacted by lower licensing income in Latin America and the absence of one-off title rights sales in Hong Kong last year. Overall, the revenue metric remains Favorable.
Earnings per share
| Metrics | Current | Previous |
|---|---|---|
| Earnings per share | +20.0% | +12.0% |
| Rating | Favorable | Favorable |
Earnings per share for the first quarter of FY2025 has increased by 20.0% to SGD0.036 per share from SGD0.030 per share for the same period in the previous financial year. This was mainly contributed by F&B, which saw an earnings growth of 17%. This metric remains Favorable and is a good aspect of the dividend stock.
Operating Cash Flows
| Metrics | Current | Previous |
|---|---|---|
| Operating Cash Flows | No Update | -17.3% |
| Rating | Unfavorable | Unfavorable |
Based on the announcement on 7 February 2025, operating cashflows was not included in the business update for the first quarter of FY2025.
The metric was Unfavorable in the previous quarter as operating cash flows for FY2024 saw a decrease by 17.3% to SGD216 million from SGD262 million in the previous financial year.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing ratio | 34.1% | 35.0% |
| Rating | Favorable | Favorable |
Gearing ratio stands at 34.1% as of 31 December 2024. This metric is computed using total assets of SGD5,327 million and total liabilities of SGD1,818 million. Do note management have provided a gearing ratio of 16.6% using borrowings less cash and bank deposits over total equity. The metric remains Favorable.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest coverage | No Update | 7.1x |
| Rating | Favorable | Favorable |
Based on the announcement on 7 February 2025, no detailed breakdown of the financial results to determine the interest coverage was provided in the business update for the first quarter of FY2025.
The metric was Favorable in the previous quarter as the interest coverage stands at 7.1 times as of 30 September 2024, using profit before interest and tax of SGD297 million and finance costs of SGD42 million.
Price-to-book ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 0.66 | 0.70 |
| Rating | Favorable | Favorable |
Based on the announcement on 7 February 2025, net asset value (“NAV”) was not included in the business update for the first quarter of FY2025.
The Price-to-book (“P/B”) ratio for F&N is 0.66. This is computed using the Net Asset Value (“NAV”) per share of the Group as of 30 September 2024 of SGD1.97 per share and the closing share price of SGD1.31 as of 7 March 2025. This is Favorable as you will be paying a discount to its book value.
As of 7 March 2025, the Market Capitalization is approximately SGD1,908 million.
Website: Yahoo Finance: Fraser and Neave, Limited (F99.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 3.05% | SGD 0.040 |
| 2024 | 4.20% | SGD 0.055 |
| 2023 | 3.82% | SGD 0.050 |
| 2022 | 3.82% | SGD 0.050 |
| 2021 | 3.82% | SGD 0.050 |
| 2020 | 4.20% | SGD 0.055 |
F&N have been paying relatively consistent dividends over the last few years. With the total dividend payout in 2024 of SGD0.055 per share and using the closing share price of SGD1.31 as of 7 March 2025, this translates to a recurring dividend yield of 4.20%. For my benchmark, a general reasonable yield would be around 5.25%. The dividend yield is Unfavorable.
Website: Reasonable Dividend Yield 2025Q1 – 5.25%
If using dividend yield of 5.25% as a benchmark, based on the dividend of SGD0.055 there is potential for F&N to see its share price drop by another 20.0% to SGD1.05. Investors will need to be mentally prepared that the share price may fall further to match market expectations.
| Yield | Share Price | Downside |
|---|---|---|
| Current | 1.31 | – |
| 5.25% | 1.05 | -20.0% |
| 6.25% | 0.88 | -32.8% |
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Revenue | +16.3% | Favorable |
| Earnings per share | +20.0% | Favorable |
| Operating Cash Flows | No Update | Unfavorable |
| Gearing ratio | 34.1% | Favorable |
| Interest coverage | No Update | Favorable |
| Price to Book Ratio | 0.66 | Favorable |
| Overall | Favorable |
Overall, it remains Favorable to invest in F&N. Their operations looks to remain sustainable. Based on this quarter business update, F&N is likely to be able to generate sufficient earnings to sustain their current dividend payout. Investors will be able to continue to enjoy this cash flow while waiting for further news from speculation.
Background
Fraser and Neave, Limited (“F&N” or the “Group”) had its origins more than a century ago, in the spirited decisions of two enterprising young men, John Fraser and David Neave, who diversified from their printing business to pioneer the aerated water business in Southeast Asia in 1883. From a soft drinks base, F&N ventured into the businesses of beer in 1931, dairy in 1959, property development and management in 1990, and publishing & printing in 2000. In 2012, the Group divested a substantial part of its beer business. In 2013, as F&N celebrated its 130th year of operation, it also welcomed its new majority shareholder, the TCC Group, which is engaged in food and beverage, real estate, industrial trading and consumer products, insurance and agriculture. In January 2014, through a distribution in specie and re-listing of Frasers Property Limited by way of introduction on the Singapore stock exchange, the Group demerged its Properties business.
Today, F&N is a leading Southeast Asian consumer group with expertise and prominent standing in the Food & Beverage and Publishing & Printing industries. Leveraging its strengths in marketing and distribution, research and development, brands and financial management, as well as years of acquisition experience, the Group provides key resources and sets strategic directions for its subsidiary companies across both industries.
Listed on the Singapore Stock Exchange, F&N ranks as one of the most established and successful companies in the region with an impressive array of renowned brands that enjoy strong market leadership. F&N is present in 11 countries spanning Asia Pacific and the Americas, and employs over 7,200 people worldwide.
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Website: Fraser and Neave Limited (SGX: F99): 2024 Full Year Result
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