Harry’s successfully
launches 15 million share offer* on OTC Capital
• Shares debut on OTC
Capital on 29 January 2007
• Offer of 15.0 million placement shares (the “Placement
Shares”) at an issue price of S$0.22 per share completely
subscribed by pre-registered investors
• A total of $3.3m was raised
SINGAPORE –
25 January 2007 – Harry’s Holdings Ltd. (“Harry’s
Holdings”), one of the leading operators of premium
bars, restaurants and other businesses in Singapore under
its group of companies (the “Harry’s Group”
or “Group”), announced today that it has successfully
launched 15.0 million Placement Shares (the “Offer”)
to be admitted to trading on OTC Capital*,
an initiative of Phillip Securities Pte Ltd (a member of
PhillipCapital). At an issue price of S$0.22 per Placement
Share, Harry’s Holdings’ Offer and placement
of the 15.0 million Placement Shares raised a total of S$3.3
million.
Trading in the Placement Shares
commences at 9:00am on Monday, 29 January 2007.
The Offer
The 15.0 million placement shares comprise 10.0 million
New Shares and 5.0 million Vendor Shares. The Offer was
launched on 16 January 2007 and the application list closed
on 24 January 2007.
The Board of Directors of
Harry’s Holdings Ltd is pleased to announce that,
as at the close of the Application List on 24 January 2007,
the offer of 15.0 million placement shares was completely
subscribed.
Said Mr Mohan Mulani, CEO
of Harry’s, “We are delighted with the positive
response to our Share Offer and view this as a strong endorsement
of the market’s acceptance and approval of Harry’s
successful business model. With our experienced management
team and proven track record, we believe that the Harry’s
Group is well-positioned to capitalise on the ample opportunities
in the F&B industry in Singapore and the region; and
further expand our market presence and brand appeal to bring
value to our shareholders.”
On the decision to be quoted
on OTC Capital, Mr Mulani commented, “The Harry’s
Group is at an inflection point. We are at a stage where
we are ready to take Harry’s to the next level of
growth, but it is also important that we choose the equity
funding platform that is right for us at this particular
point in our development. OTC Capital offers a targeted
group of registered investors, and allows us to raise capital
very quickly in a cost effective and simple manner. We feel
that the platform meets our wider needs.”
Commented Mr Loh Hoon Sun,
Managing Director of Phillip Securities, “OTC Capital,
a platform established and operated by Phillip Securities
Pte Ltd, is an attractive proposition for both the investors
as well as companies. On one hand, it offers investors potential
returns as OTC Capital only admits companies with viable
business and good growth prospects. On the other hand, it
offers the companies a cost-effective platform to raise
capital within a reasonably short period of time.”
Corporate profile
The Harry’s Group owns and operates 13 premium lifestyle
bars , six restaurants and one cafe situated at strategic
urban locations in Singapore. Of these, one bar is scheduled
to open in end January 2007.
In addition to these Food
and Beverage (“F&B”) outlets, the Harry’s
Group also operates a Gymboree Play and Music (“Gymboree”)
business. The Harry’s Group currently operate two
Gymboree establishments in Singapore and Malaysia and further
sub-franchised four establishments. Gymboree provides interactive
play and music programmes to engage and challenge children
up to five years old in the development of their cognitive,
social and physical skills.
Whilst there has been much
talk of the transient and competitive nature of the F&B
industry in Singapore, Harry’s has firmly established
itself as a long-term player, having been operating and
growing progressively since 1992. Harry’s has weathered
adversities such as the Asian Financial Crisis, NASDAQ Crash
and SARs amongst others, and has remained a viable, sustainable
and successful business.
Harry’s resilience has
been in part due to its well-recognised brand name
built on the premium bar experience it offers, a potent
combination of consistent service and F&B quality, a
relaxed setting that is designed with upscale flair, and
excellent live music entertainment acts. Its unique cosmopolitan
concept appeal to Harry’s target customers of affluent
local and expatriate PMEBs in the business and finance industries,
as well as tourists.
Mr Mulani said, “Branding
is an important area for us and we have positioned the Harry’s
brand to reflect our unique cosmopolitan concept which appeals
to a distinct and identifiable customer segments. Our holistic
product offering, which encompasses the look, feel, sound
and service provided, is about matching the premium lifestyle
expectations of our customers.”
He continued, “In particular,
Harry’s bars are renowned for featuring some of the
best live music entertainment acts, especially jazz music,
in Singapore. Famous musicians who have performed at our
establishments include Bob James, Wynton Marsales and Lincoln
Trio Orchestra. And our resident bands include quality bands
such as Tania and Chromazone.”
As part of its ongoing efforts
to strengthen brand awareness, Harry’s undertakes
above-the-line marketing, events sponsorship and regular
direct marketing efforts such as loyalty card and stored
card value programmes to reach out to its database of over
6,000 customers.
Harry’s success is also
attributable to its strategically located establishments
in Singapore. Harry’s situates its establishments
in accessible places with high customer traffic flow, such
as city areas and business districts, in order to attract
existing and potential customers. In selecting the locations,
Harry’s takes into consideration the proximity between
its establishments to minimise and limit customer cannibalism.
According to Mr Mulani, “Harry’s
has grown significantly since the opening of our first and
flagship Harry’s Bar at Boat Quay in 1992. Today we
have built up a large and regular customer base
and every month, more than 65,000 customers patronise our
establishments.”
The experienced management
team behind the helm of Harry’s has played
a key role in the growth of the Harry’s Group. Led
by Mr Mulani, who has more than 12 years experience in the
F&B industry, most of Harry’s senior management
possess, on average, more than 10 years of experience in
the bars, restaurants and hospitality industry.
Harry’s has won numerous
awards over the years. These include:
• 1994: Tourism Award for Night-Spot of The Year
• 1995: Newsweek International’s World’s
Best Bar Award
• 1999: The Great Heineken Bar of the World Award
• 2002: The Heineken Starbar Award
• 2005: The Singapore Promising Brand Award in 2005
• 2005 to 2006: Patron of the Arts – Arts Supporter
Award
Indicative of the commitment
that the management has in bringing top business individuals
into the Harry’s team to guide the Company’s
growth, Mr Richard Eu, Group CEO of Eu Yan Sang International
Ltd, has been appointed the Chairman and Independent Director
of Harry’s Holdings’ Board of Directors on 24
January 2007.
Commenting on Mr Eu’s
appointment, Mr Mulani, said, “Richard brings with
him a wealth of branding, retail and marketing experience
and expertise all over the region which will be invaluable
in driving the strategic direction of our Company. Richard
joins Harry’s at an important time and we expect to
benefit from his deep understanding of the importance of
branding and marketing, and his wide business networks in
the region as we move forward to execute our growth plan.
I look forward to tapping on his insights and business acumen
as we enter the next stage in our Company’s development.”
Financials
The successful track record of the management team is also
reflected in the growth of the Group. Revenue grew by a
compounded annual growth rate (“CAGR”) of 55%,
from S$5.9 million in FY2003 to S$14.3 million in FY2005.
Revenue growth from 1H05 to
1H06 increased from S$6.2 million to $9.0 million, a year-on-year
jump of 46%, with all three business segments contributing
double digit percentage increase. In line with its healthy
revenue growth, the Group posted a profit before tax of
S$0.8 million in 1H06, up 118% from S$0.4 million in 1H05.
Of significance, as at October
2006, Harry’s Group registered a profit before tax
of S$1.5 million on the back of revenue totalling S$15.3
million. To put the numbers in perspective, the latest 10-months
figures have already surpassed the pre-tax earnings of S$0.8
million on revenue of S$14.3 million achieved for the entire
financial year 2005.
Mr Mulani commented, “Despite
operating in a competitive industry, Harry’s has grown
from strength to strength through the years in terms of
financial performance, market presence and brand equity.
As a gesture of good will and to reward our investors, we
intend to propose dividends of no less than 40% of our net
profit attributable to shareholders for FY2007.”
Future plans and prospects
A strong economic outlook, burgeoning middle class population
and the impact of globalisation has led to greater consumer
affluence and sophistication, and in turn, an increased
demand for premium lifestyle products and services. Along
with this, there is an increasing popularity of cosmopolitan
pubs and clubs across the region. In addition, the community
of PMEBs in as well as tourist arrivals and business travelers
to Singapore and other regional cities have also grown as
a result of economic development and urbanization.
Juxtaposed against this landscape, Harry’s believes
that industry outlook and prospects for its business is
positive. It has earmarked the amount raised from the placement
of the Placement Shares for the following uses:
• Business expansion in Singapore and overseas
• General working capital purposes
As part of its future plans,
Harry’s intends to:
• Expand its market presence in Singapore and the
region;
• Continue its focus on marketing strategies and further
enhance its brand recognition and premium;
• Enhance its Harry’s bars and restaurants concepts
and;
• Expand its business through M&As, joint ventures
or strategic alliances.
“With our proven track
record and new funds raised from OTC Capital, we intend
to maintain our leadership position in the premium lifestyle
F&B sector in Singapore, and pursue further opportunities
to introduce our recognised brand into the region”
said Mr Mulani.
*The Offer was made in reliance on the exemption under section 272A(1) of the Securities and Futures Act (Cap. 289) (the “SFA”). It was not made in or accompanied by a prospectus that is registered by the Monetary Authority of Singapore (the “MAS”). OTC Capital is not an approved exchange or a market and Phillip Securities Pte Ltd is not a recognized market operator within the meaning of section 6 of the SFA.
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About PhillipCapital
PhillipCapital is a group of companies which offers a full
range of quality and innovative financial services to retail,
corporate and institutional customers. PhillipCapital is
an integrated financial services provider with more than
2500 staff in Asia and Europe and total shareholders’
funds in excess of US$300 million.
We provide a comprehensive suite of financial services to
individual and corporate investors as well as institutions.
Our services range from fund management, unit trusts, hedge
funds, insurance planning, mortgage loans, investment research
and broking in bond, securities, futures, foreign exchange,
precious metals and commodities. Institutions can also benefit
from our corporate finance and advisory services as well
as information technology solutions.
Contact Information
For Harry’s:
August Consulting
Tel: (65) 6733 8873 Fax: (65) 6733 9913
Giselle LAU – giselle@august.com.sg
Adeline SIM – adeline@august.com.sg
For Phillip Securities:
Daphne Lim
Manager, Corporate Communications
daphnelimyl@phillip.com.sg
DID: (65) 65311 569 Fax: (65) 6535 6631
