SILVER CHEF COOKS UP HALF YEAR PROFIT

SILVER Chef (ASX:SIV) increased net profit after tax by 9.5 per cent to $6.5 million (from $5.9 million) for the first half of FY14, the company reported today.

Revenue is up 25.9 per cent to $67.4 million and net operating cash flows up 10.9 per cent to $40.7 million.

The hospitality infrastructure provider says the rise in NPAT is largely due to the write-back of long-term incentive accruals and an accounting change “in recognition of long term contracts as finance leases”.

Underlying Net Profit After Tax was down 1.4 per cent to $5.8 million.

“The underlying result reflects the impact of slower than expected asset acquisitions in the GoGetta business and the costs of investing for longer term growth in Canada,” says the company in a statement.

The hospitality division increased acquisitions to $47 million, up 26.9 per cent since June 30 and hospitality rental assets grew 9.3 per cent to $189.6 million.

GoGetta’s asset acquisition rate slowed to 3.9% from 31.6% in FY13 and 53.3% in FY12 with $23.6 million in acquisitions for the first half. Rental assets (at cost) increased 1.1% to $84.9 million (30 June 2013: $84.0 million).

“GoGetta suffered from internal issues around recruitment, training and support of sales staff. Resolution of these issues is well underway,” says the company.

The Canada investment accounted for $0.6 million from the profit.

SIV will distribute a 14 cent fully franked dividend. Net profit after tax for FY14 is expected to be between $12.3 million and $12.7 million.

“This reflects the positive impact of the classification of long term rental contracts as finance leases offset by the slower than expected GoGetta asset acquisitions in the first half which will have an impact on
GoGetta rental revenue in the second half of FY14.”

SIV is trading up 4.53 per cent at $5.540.