Zen plans IPO to fuel expansion

Corporate January 24, 2019 01:00

By KWANCHAI RUNGFAPAISARN
THE NATION

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ZEN CORPORATION Group Plc yesterday said it plans to make an initial public offering (IPO) of its shares to fund the expansion of its restaurant businesses and become the leader in Thailand’s food service industry.



The company announced the move after the Securities and Exchange Commission (SEC) confirmed that it had received the filing for the sale of 75 million shares in the company.

 The group highlighted the prospects for its food service business, which includes restaurants and related businesses such as food delivery, catering, restaurant management and retail food.

As well as funding an increase in the number of branches of its restaurants, the company said the IPO proceeds would also be put to improving its existing restaurants and increasing work efficiency. Branches of its restaurants would be added in the home and international markets in the plan to boost sales.

Boonyong Tansakul, chief executive officer of Zen, said that in addition to the company’s ambition to be the leader in the food service business in Thailand, it aims to be regarded as having the most popular and trusted brands among consumers as well as with business partners and other concerned parties.

 “This year, we plan to add 36 of our owned branches and 87 franchise branches, and in 2020, we plan to expand by a further 50 of our owned branches and 175 franchise branches,” he said, adding that the group expected its total revenue to reach Bt10 billion by 2022.

Boonyong said that Zen distinguishes itself as being a complete food service provider. It not only has restaurant and franchise businesses, but also the other related businesses, such as food delivery and retail food.

“In this way, we can respond to the demands of consumers at all levels and gain access to their diverse lifestyles in a comprehensive manner,” he said.

 “In the past two years, the group has invested in the management system within the organisation, including increasing personnel and investing in information systems to support business expansion both domestically and internationally. 

“This has led to increased administrative expenses but the result is that at present the group stands ready to expand business and can use the support base that it had prepared beforehand to fully support growth.”

Boonyong said the group is also a holding company and has shares in other companies in the restaurant and other related businesses. 

Its operations comprise three categories: restaurant business, franchise, and related businesses, such as food delivery, catering, restaurant management, restaurant consultancy and retail food business. The retail food business is composed of ready-to-cook and ready-to-eat food, which takes popular products from restaurants and sells it to general consumers.

The group has 12 restaurant brands – six each as Japanese and Thai. The Japanese restaurant brands are ZEN, Masha by ZEN, Sushi Cyu Carnival Yakiniku, AKA, Testu, and On the Table Tokyo Cafe. The Thai brands are Tummour, Laoyuan, Jaew Hon, Pho, de Tummour, and Khiang by Tummour. The last offers Thai dishes popular with general consumers, such as stir-fried pork with basil. Khiang opened its first branch at a PTT petrol station in Jesada Bodin, Nonthaburi. 

The group has also franchised its flagship restaurant brands, such as AKA, On the Table Tokyo Caf้, Tummour, and Pho, into potential markets abroad, especially Laos, Cambodia and Myanmar.

By the end of last year, Zen had 255 restaurant branches under its brands, in Thailand and abroad. Of these, 167 branches are Thai restaurants and 88 are Japanese. The group owns and operates 110 of these branches and the other 145 operate under franchises.

Zen has registered capital of Bt300 million, with 300 million common shares at a par value of Bt1 per share. The registered capital comprises Bt225 million in paid-up capital and the group will offer the 75 million IPO shares, or no more than 25 per cent of all issued and paid-up common shares of the company after the IPO. The funds raised will be used to expand the business of the group, including expansion and improvement of the restaurant branches, repay loans from commercial banks, and use as working capital in the business.

“When the SEC gives the final approval, the date for the IPO will be set and it is expected that the Zen will be listed on the Stock Exchange of Thailand in the first quarter of this year,” said Pongsak Phrukpaisal, managing director of Kasikorn Securities Plc, in his capacity as financial adviser

Yupaphan Ekasittikul, chief financial officer of Zen, said that for the first nine months of last year the company posted total revenue of Bt2.22 billion, an increase of 21.9 per cent from the Bt1.82 billion in the same period of the previous year.

 The group earned a net profit of Bt108.7 million, up 120.9 per cent from the Bt49.2 million for the same period of the previous year. The increase was driven by the growth of the restaurant and franchise businesses.

 

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