Herfy Food Services Co.’s fourth-quarter net profit of SAR 52 million was broadly in line with Al Rajhi Capital and consensus estimates’ of SAR 54 million and SAR 53 million, respectively, the brokerage said in an earnings review on Wednesday.
The growth in bottom-line was largely driven by solid performance in top-line which benefitted from the opening of new restaurants with support from existing stores.
Revenue increased 8.8 percent year-on-year to SAR 325 million beating the brokerage's estimate of SAR 315 million, driven by solid performance from restaurants segment.
Al Rajhi Capital maintained an "overweight" rating on the stock, revising the target price upwards to SAR 56 a share.
"Going forward, the company’s top-line growth is likely to be supported by the continued expansion in number of restaurants, before LFL sales growth gradually picks up as consumer sentiments begin to normalize," it noted.
The brokerage expects Herfy to continue its restaurant expansion in FY2019, similar to the rate in FY2018.
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