Boustead Singapore

you sell when someone buys ESRI parent and they couldn't partner with ESRI anymore

the most significant earners for the past 5 years is industrial real estate solution, although geo-spatial has been a steady performer. However, industrial real estate solution division is losing its shine. Boustead needs to find another big earner, or its earning will slowly decrease as industrial real estate solution earning slows

actually do they sell map data subscriptions? i think only the parent ESRI do. that sounds very lucrative. selling software such as Acrgis sounds pretty inconsistent in earnings.

(09-12-2011, 01:10 PM)Drizzt Wrote: actually do they sell map data subscriptions? i think only the parent ESRI do. that sounds very lucrative. selling software such as Acrgis sounds pretty inconsistent in earnings.

Why sounds inconsistent? the nature of selling software is to reach a scale when the annual license cost (normally lumped in as annual maintenance cost) can sustain the operation cost (mostly staff cost). The remaining will be profit. isn't that the case?

hi valuestalker, my understanding is that Arcgis clients are perpetual license. not sure if support is lump within it. i don't think they recognise the profit over a period of time right?

(09-12-2011, 03:03 PM)Drizzt Wrote: hi valuestalker, my understanding is that Arcgis clients are perpetual license. not sure if support is lump within it. i don't think they recognise the profit over a period of time right?

Hi Drizzt,
I did try exploring ArcGIS (ESRI's software) for use in my workplace.
Apparently (if the vendor quoted me correctly), the license cost is annual.
The cost depends on which type of service you acquire.
note: the vendor was not ESRI though.

I guess that is the reason why Mr Wong was saying that "a quarter of Boustead's revenue is recurring in nature".
If i interpreted or heard it correctly, that is.

Hmm that sounds in stark contrast to what i was quoted haha! truly hope that the structure is such that there are long term consultation services and mainenance and support to supplement inconsistent sales

Dear all, Part 2 of Boustead's 1H FY 2012 Analysis and Review is now up on my blog. Please feel free to visit and leave comments, thanks!

A snippet as follows:-

"Engineering Services as a whole saw a significant decrease in revenue for 1H 2012, down 53.5% to just $128.5 million from $276.2 million. This can be largely attributed to the drop in revenues in the real estate solutions division which saw a 73% year on year fall in revenue to $50.9 million (but 1H 2011’s numbers included the disposal of an industrial property worth $67.8 million). With Boustead’s focus being more on DB&L projects in order to build up their portfolio of recurring rental income, there has thus been less D&B contracts awarded. This, coupled with the slowdown in 1H 2012 also meant that there was less revenue to recognize for the division. However, my view is that Boustead’s Real Estate Division would serve as a buffer for the Group should the Euro Zone collapse, and also help them to generate steady and predictable cash flows during uncertain times. Since most (if not all) of their clients are blue-chip companies, there is also a lower risk of non-payment or default unless a major crisis occurs within the specific niche industries that each client is in."

1. I think for the moment, it is better for Boustead to do D&B, rather than DB&L given that the current industrial real estate is on the high side (both land lease cost and construction cost). Although the rental is also higher, for long term, it is better to own an asset when it is cheap rather than it is expensive.

2. Although salcon water has not been performing for very long, it has the best prospects among all those division. With people more concerning about water scarcity and pollution, the future is rather bright for it.

Dear all, Part 3 of Boustead's 1H FY 2012 Analysis and Review is now up on my blog. Please feel free to visit and leave comments, thanks!

A snippet as follows:-

"The remaining three properties will be completed in 2012, with the latest being June 2012 (1Q FY 2013). Therefore, the financial impact of the entire portfolio will only be felt in late FY 2013, and this does not include possible additions to the portfolio during the first six months of 2012. The total square metres of the properties has exceeded 90,000, and it is Boustead’s aim to grow it to 200,000 to 300,000 sqm before the entire portfolio can be considered for sale to an industrial REIT. I had attempted to compute a blended rental income per square metre using information from CommerciaGuru dot com, but apparently different areas of the industrial park can command different rental rates, and the variance can be rather pronounced as it is also tied to the age of the building."

Note: This will be my last company analysis. Target Date for shutting down of my blog is Jan 31, 2012. All historical entries will be accessible but no more new posts after this date. Thanks.