Investors bearish on JFC due to its acquisition of Coffee Bean

Investors are bearish on JFC due to its acquisition of a business with revenue losses in its financial books for 2017 and 2018. They didn’t like that because they know it’ll negatively impact the overall financial statement of JFC upon acquisition.

Foreign investors registered a Net Foreign Selling worth P424 million.

Meanwhile, Regina Capital managing director Luis Limlingan explained that Jollibee’s latest acquisition, Coffee Bean, had lackluster earnings in the past two years. It recorded losses of $21 million in 2018 amid a meager revenue growth of only 4.1% year-on-year.

“Even though it usually takes around 3 years for Jollibee to turn its acquired businesses around, it does add challenge considering that the firm is still in the midst of rationalizing Smashburger’s operations,” Limlingan said.

The acquisition of Coffee Bean also delayed the planned initial public offering of Highlands Coffee, the other coffee business of Jollibee. It was supposed to be this July.

“Let’s see what Jollibee can do to Coffee Bean if it can turn it to profits. Their management has good track record,” Alviar said.

She added that the support level of the stock is now at P240, noting that buying the stock now is only for those looking at the long term.

The Philippine Stock Exchange index also ended the trading day in the red, 1.09% down to 8,161. Most of the counters, except for services (up by 0.3%), incurred losses.

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