Kingsmen Creatives

Annualized ROE for Kingsmen Creatives stands at 24.9% for 1H FY 2010, and this is without leverage. Kingsmen's ROE has been consistently very high without excessive debt, their Balance Sheet is strong and they are consistently generating Free Cash Flows every year. They also pay very regular dividends, at 1.5c/share interim and 2c/share final (for FY 2009).

Business Times - 13 Aug 2010

Kingsmen Creatives Q2 profit up 30.2% to $4.6m

By VEN SREENIVASAN

DESIGN group Kingsmen Creatives chalked up a 30.2 per cent rise in second-quarter profit to $4.6 million as it booked in higher contributions from its exhibitions and museums and interiors divisions.

With the latest results boosting its first-half earnings 17.2 per cent to $6.9 million, from $5.9 million a year earlier, the company has declared an interim dividend of 1.5 cents a share.

Q2 revenue was up 22 per cent to $64.6 million, from $53 million a year ago, lifting H1 revenue 25.5 per cent to $111.3 million.

Kingsmen had $29 million cash at end-June and an order book of $187 million at the start of this month.

Its exhibitions and museums division registered Q2 revenue of $29.2 million, which was $2.2 million or 8.5 per cent more than a year earlier.

Key projects carried out by this unit included seven pavilions at World Expo 2010 in Shanghai.

Other projects included events such as Asia-Pacific Maritime 2010, Food and Hotel Asia 2010, the Singapore Airshow 2010, Tax Free Asia-Pacific 2010 and other trade exhibitions, and for Nissan/Infiniti at various auto shows.

The interiors division posted Q2 revenue of $32.3 million, which was $8.9 million or 38.1 per cent more than a year earlier.

This unit continues to pull in revenue from retail store roll-outs by key customers and brands such as Tiffany and Burberry in Singapore, Hong Kong and China.

Kingsmen said the opening of the Marina Bay Sands resort boosted its revenue: 'We have completed 13 shops which contributed about $6 million to our revenue as at H1, and have at least 13 more shops to be completed by year-end.'

Projects in hand include boutiques for brand names such as Bottega Veneta, Burberry, Chanel, Chaumet, Fendi, Polo Ralph Lauren, Swarovski, The Hour Glass, Tiffany & Co and Uemo Collezioni & Stefano Ricci.

Kingsmen's research and design division chalked up $1.3 million in Q2 revenue, while its integrated marketing communication division's revenue came in at $1.8 million.

The company's executive chairman Benedict Soh said Kingsmen delivered well on all its projects.

'With Asia spearheading the global recovery, our operational footprint is exactly where it ought to be - at the heart of where it is all happening,' he said, adding that the government's drive to make Singapore a regional hub for MICE activities will further boost Kingsmen's opportunities.

'The next few years will be even more exciting for us as the world looks towards Asia for solutions,' Mr Soh added.

This is very promising and positive news for Kingsmen, as well as all players in the MICE industry. Kingsmen had done about S$80 million of work on Universal Studios (USS) so far, and there is still Phases II and III and VO (Variation Orders) which may further add to their order book.

But this piece of news means they can probably build up their thematic/scenic competencies better and be able to snare some parcels of work at these upcoming theme parks in S.E.A.

Growing Asian middle class fuels theme park boom
Channel News Asia
Posted: 19 September 2010 1411 hrs

SINGAPORE - When Singapore first announced it was building a Universal Studios theme park, sceptics wondered if the complex would draw enough crowds to be commercially viable.

But just six months after opening, Universal Studios Singapore has already welcomed more than one million visitors, and other countries in Asia are building even bigger theme parks.

Asia has become the new frontier for large-scale outdoor entertainment complexes thanks to growing affluence in large emerging economies like China, India and Indonesia, and cheaper air travel.

"The industry is moving to Asia," said Christian Aaen, Asian regional director of research firm AECOM Economics, which specialises in entertainment and leisure industry analysis.

"With key fundamentals in place such as the growing middle class and incomes in Asia as well as demand for entertainment and leisure time, this is the perfect product for tourism and economic development," he told AFP.

Tokyo Disneyland and Disney Sea, the Universal Studios park in Osaka and South Korea's homegrown Everland ranked among the world's top 10 theme parks in terms of visitors last year, according to industry consultancy Themed Entertainment Association (TEA).

Encouraged by Asia's promise, Universal Studios signed a deal in January to build its largest theme park in the world in South Korea at a cost of around 2.67 billion dollars.

When completed in 2014, the resort will be bigger than Universal Studios' four other parks in Hollywood, Florida, Osaka and Singapore combined.

Disneyland has not fared well in Hong Kong -- with a 70 million Hong Kong dollar (nine million US) loss last year, according to the South China Morning Post -- but it is going ahead with a new franchise in Shanghai, with construction expected to start in November.

Denmark's Legoland is setting up its first Asian branch in Malaysia's Johore state close to Singapore, hiring builders to use the famous little plastic bricks to replicate national and state landmarks.

A recent Asian Development Bank (ADB) report said the region's middle class was growing at an exponential rate and poised to become the world's single biggest group of consumers.

In 2008, some 1.9 billion people were broadly classified by the ADB as part of the middle class in Asian developing countries, more than triple the group's size of 565 million in 1990.

China in particular saw its middle class boom, with statistics showing the share of the Chinese population with daily incomes of six to ten dollars surging from 4.8 to 25.5 percent between 1995 and 2007.

In India, people in that income bracket increased from about 29 percent in 1993-94 to 38 percent in 2004-05, the ADB report showed.

Wealthy Singapore, which has only five million people, is a major beneficiary of Asia's increasingly mobile middle class families.

Nearly 1.1 million tourists entered Singapore in July -- a record high, thanks in part to Universal Studios -- with Indonesia, China, Malaysia and India in the top five countries of origin along with Australia.

"As developing Asia's people secure their middle-class status, its emerging consumers are very much expected to become the next global consumers and assume the traditional role of the US and European middle classes," the ADB said.

AECOM's Aaen said the opening of Universal Studios in Singapore "marked the beginning of the new decade where Asia will dominate and remain the primary region for future growth of the industry".

- AFP /ls

While there is no doubt that building exhibits and retail outlets for the new theme parks coming up across Asia will become another growth driver for Kingsmen, we must be mindful that such contracts are generally much larger in value terms, and will take much more time, effort, and resources to secure and complete. Such contracts are also fewer in numbers, and the impact on Kingsmen's P&L will be 'lumpy'.

In the remaining months of this FY10, apart from the high demand for Kingsmen's services in Singapore and in the region, this premier group will be kept very busy by the contracts to fit out over 40 high-end retail shops in the yet to be fully-opened Marina Bay Sands Shoppes....
http://www.marinabaysands.com/Shopping/The_Shoppes.aspx

as well as high-end retail shops in other new and revamped malls like the soon-to-be-opened Knightbridge along Orchard Road.....
http://www.greatnewplaces.com/t-Knightsbridge

(25-09-2010, 02:14 PM)dydx Wrote: While there is no doubt that building exhibits and retail outlets for the new theme parks coming up across Asia will become another growth driver for Kingsmen, we must be mindful that such contracts are generally much larger in value terms, and will take much more time, effort, and resources to secure and complete. Such contracts are also fewer in numbers, and the impact on Kingsmen's P&L will be 'lumpy'.

In the remaining months of this FY10, apart from the high demand for Kingsmen's services in Singapore and in the region, this premier group will be kept very busy by the contracts to fit out over 40 high-end retail shops in the yet to be fully-opened Marina Bay Sands Shoppes....
http://www.marinabaysands.com/Shopping/The_Shoppes.aspx

as well as high-end retail shops in other new and revamped malls like the soon-to-be-opened Knightbridge along Orchard Road.....
http://www.greatnewplaces.com/t-Knightsbridge

Hi dydx and all,

While I would agree that such projects in terms of theme parks will be much larger and complex and therefore require more expertise and manpower, it would also mean that more than one party would get contracted as there will be several phases and many parcels of work to go around. Hence, the usual "big boys" in the industry such as Pico FE, Cityneon and Kingsmen will get a share of the huge contract.

Incidentally too, I had attended a recent "Meet the CEO" session organized by Kim Eng with Kingsmen Creatives' CEO Benedict Soh and General Manager Andrew; and I had the chance to meet the man, interact with him in an informal setting and ask some questions too.

Below are what I managed to summarize from the short 1-hour session (note: market sensitive information will NOT be put down in this post):-

1) As dydx has mentioned, there are almost 40 shops more to fit out at Marina Bay Sands. This is out of about 300 shops thus representing about 13.3% of all the shops there.

2) Phase II and III of USS will be awarded in the next 2 to 3 years; and Kingsmen are confident of snaring these projects.

3) The first phase contract of Abu Dhabi Ferrari World Theme Park worth S$1 million is completed.

4) Disneyland Hong Kong recently awarded Kingsmen a contract, and there are 3-4 parcels of work to be handed out to a few contractors. They want to expand before Universal Studios start operations in Korea.

5) Roll-out programs for international brands continue to be strong, including fixtures exports to Europe and USA including Japan too. Some of these well-known brands include Swarovski (2 year contract in Japan, NZ, Korea and Taiwan) and Tag Heuer (lots of projects for FY 2010 and FY 2011).

6) Kingsmen is building up their alternative media marketing through Ooh-Media (an associated company). They own the Orchard Road Building LED Billboard and also helped to set up the Heineken Booth as an ad-hoc event.

7) Benedict Soh emphasized that Kingsmen had 70% repeat clients which was very high. Some clients paid up to 70% upfront once a contract had been confirmed. For trade shows it is usually 50% up front or up to 80%, but there is usually no problem collecting debts.

8) For Group Structure, the strategy for Kingsmen is to partner with local companies in regional countries. Kingsmen will take majority stake if possible but for Japan and Korea they own just 30% (associates). For India, there is a JV of 35% stake and projects are separately negotiated. For China, they own 80-81% of their subsidiary there but World Expo was one of the projects which was a collaboration between Kingsmen Shanghai and Kingsmen Singapore.

9) There is a twice a year BOD meeting, and senior project managers and designers will be sent for workshops and there is also a Group Design competition.

10) Kingsmen has won the Interior Builders Award for the 3rd year running.

11) There have been offers for Kingsmen but Benedict had rejected them as they were not attractive. But he is not averse to selling the company if the right offer came along....

12) Pico FE is strong in exhibitions and museums and have handled world-class events such as APEC Summit which is too large-scale for Kingsmen. Kingsmen still need time to build up their competencies, but are stronger than Pico FE in terms of Interiors design. Kingsmen plan to double their revenue over 5 years.

Please also check out Kingsmen's latest FY 2010 newsletters through this link:-

http://www.kingsmen-int.com/News/News.as...ewsletters

There are two of them.

Cheers!

just to share while i was in ho chi minh last dec, i met an old classmate who holds quite senior position and has been working for kingsmen in vietnam for some years. There was an exhibition preparation ongoing at that time and he brought me to the site and i began to understand and appreciate how a day work in kingsmen is like in the preparation..

(26-09-2010, 08:57 PM)pianist Wrote: just to share while i was in ho chi minh last dec, i met an old classmate who holds quite senior position and has been working for kingsmen in vietnam for some years. There was an exhibition preparation ongoing at that time and he brought me to the site and i began to understand and appreciate how a day work in kingsmen is like in the preparation..

Hi Pianist,

So how was it like from your experience? I understand Kingsmen uses a lot of contractors to sub-contract out the work....

Was your classmate happy with the Company? From what I understand work can be pretty hectic as there are tight deadlines....

(26-09-2010, 09:05 PM)Musicwhiz Wrote: Hi Pianist,
So how was it like from your experience? I understand Kingsmen uses a lot of contractors to sub-contract out the work....
Was your classmate happy with the Company? From what I understand work can be pretty hectic as there are tight deadlines....

he was happy at that time..is quite handon kinda work and a lot coordination with organizers, sub-contractors and exhibitors and logistics issues to look at..yes it was hectic work esp on the eve of the exhibition running..i like e part that the work is done on-site at the client's place itself...i understand fr him that vietnam turnover is relatively small compared to other kingsmen' markets

(25-09-2010, 06:32 PM)Musicwhiz Wrote: 11) There have been offers for Kingsmen but Benedict had rejected them as they were not attractive. But he is not averse to selling the company if the right offer came along....

This is not at all surprising, considering Kingsmen is well-established and nicely profitable, and the business generates solid positive free cash flow every year and already has a good regional presence. I suppose the right offer with an attractive enough price to Ben Soh and Simon Ong will come when the right suitor emerges, and the 2 founders and controlling shareholders must feel comfortable enough that the suitor will be able to look after Kingsmen's business and people. When such an event happens, it will likely also trigger a privatization offer at an attractive price for the benefit of the public and minority shareholders as well.

(25-09-2010, 06:32 PM)Musicwhiz Wrote:

(25-09-2010, 02:14 PM)dydx Wrote: While there is no doubt that building exhibits and retail outlets for the new theme parks coming up across Asia will become another growth driver for Kingsmen, we must be mindful that such contracts are generally much larger in value terms, and will take much more time, effort, and resources to secure and complete. Such contracts are also fewer in numbers, and the impact on Kingsmen's P&L will be 'lumpy'.

In the remaining months of this FY10, apart from the high demand for Kingsmen's services in Singapore and in the region, this premier group will be kept very busy by the contracts to fit out over 40 high-end retail shops in the yet to be fully-opened Marina Bay Sands Shoppes....
http://www.marinabaysands.com/Shopping/The_Shoppes.aspx

as well as high-end retail shops in other new and revamped malls like the soon-to-be-opened Knightbridge along Orchard Road.....
http://www.greatnewplaces.com/t-Knightsbridge

Hi dydx and all,

While I would agree that such projects in terms of theme parks will be much larger and complex and therefore require more expertise and manpower, it would also mean that more than one party would get contracted as there will be several phases and many parcels of work to go around. Hence, the usual "big boys" in the industry such as Pico FE, Cityneon and Kingsmen will get a share of the huge contract.

Incidentally too, I had attended a recent "Meet the CEO" session organized by Kim Eng with Kingsmen Creatives' CEO Benedict Soh and General Manager Andrew; and I had the chance to meet the man, interact with him in an informal setting and ask some questions too.

Below are what I managed to summarize from the short 1-hour session (note: market sensitive information will NOT be put down in this post):-

1) As dydx has mentioned, there are almost 40 shops more to fit out at Marina Bay Sands. This is out of about 300 shops thus representing about 13.3% of all the shops there.

2) Phase II and III of USS will be awarded in the next 2 to 3 years; and Kingsmen are confident of snaring these projects.

3) The first phase contract of Abu Dhabi Ferrari World Theme Park worth S$1 million is completed.

4) Disneyland Hong Kong recently awarded Kingsmen a contract, and there are 3-4 parcels of work to be handed out to a few contractors. They want to expand before Universal Studios start operations in Korea.

5) Roll-out programs for international brands continue to be strong, including fixtures exports to Europe and USA including Japan too. Some of these well-known brands include Swarovski (2 year contract in Japan, NZ, Korea and Taiwan) and Tag Heuer (lots of projects for FY 2010 and FY 2011).

6) Kingsmen is building up their alternative media marketing through Ooh-Media (an associated company). They own the Orchard Road Building LED Billboard and also helped to set up the Heineken Booth as an ad-hoc event.

7) Benedict Soh emphasized that Kingsmen had 70% repeat clients which was very high. Some clients paid up to 70% upfront once a contract had been confirmed. For trade shows it is usually 50% up front or up to 80%, but there is usually no problem collecting debts.

8) For Group Structure, the strategy for Kingsmen is to partner with local companies in regional countries. Kingsmen will take majority stake if possible but for Japan and Korea they own just 30% (associates). For India, there is a JV of 35% stake and projects are separately negotiated. For China, they own 80-81% of their subsidiary there but World Expo was one of the projects which was a collaboration between Kingsmen Shanghai and Kingsmen Singapore.

9) There is a twice a year BOD meeting, and senior project managers and designers will be sent for workshops and there is also a Group Design competition.

10) Kingsmen has won the Interior Builders Award for the 3rd year running.

11) There have been offers for Kingsmen but Benedict had rejected them as they were not attractive. But he is not averse to selling the company if the right offer came along....

12) Pico FE is strong in exhibitions and museums and have handled world-class events such as APEC Summit which is too large-scale for Kingsmen. Kingsmen still need time to build up their competencies, but are stronger than Pico FE in terms of Interiors design. Kingsmen plan to double their revenue over 5 years.

Please also check out Kingsmen's latest FY 2010 newsletters through this link:-

http://www.kingsmen-int.com/News/News.as...ewsletters

There are two of them.

Cheers!

MW, I wanted to go for it but I was busy. Did Kim Eng record it? Usually they will record it and post on Youtube. However, their Youtube channel doesn't have the videos yet.

Hi FFN,

Not that I know of.

Regards...