VICOM

goodness! after XD still @ $4.2++!! :O

Plans to cut vehicle growth rate may be delayed: Lui
by Sumita Sreedharan
Updated 02:25 PM May 04, 2012

SINGAPORE - Plans to cut the vehicle growth rate to 0.5 per cent from the current 1.5 per cent may be delayed, said Minister for Transport Lui Tuck Yew at the grounbreaking ceremony for the Tuas West Extension this morning.

Mr Lui said that he has asked the Land Transport Authority (LTA) to study if "more flexibility" can be introduced as the vehicle growth rate is reduced. The new vehicle growth rate was suppose to take effect in August for the next three years.

He also said that the LTA would look into an adjustment could be deferred due to the overestimation of the number of cars being deregistered in 2008 and 2009. Currently, under the methodology announced in 2010, LTA factors in the actual vehicle de-registrations to the half yearly quota for Certificate of Entitlement (COE) for vehicles.

Mr Lui promised more details at the end of this month.

a piece of very interesting news though this is not entirely unexpected as they are pretty worried about the after-effect should coe prices breaches 6 figures.

1.5% growth rate will be better for VICOM so long as COE prices stays at a high 5 figures.

a strong Q1 result with a 8.2% increase in revenue leading to 13.2% increase in net profit. VICOM has shown its ability to grow revenue faster than operating expense once again, as oeprating expense increases only by 3.1%. Total cash balance increases to $60m from $55m as FY dividend is not yet paid.

VICOM has once again surprised me by showing top-line growth, in a business where I had thought that top-line growth would be more muted as a result of a saturated market and with almost no room for an increase in market share. I guess VICOM is leveraging on its expertise in non-vehicular testing to provide more ancillary services and by getting more accreditations to perform testing on a variety of products. The fact that COEs are rising also means that more people would avoid scrapping their cars and would drive them longer on the roads, leading to the need for more frequent and regular inspections as these cars get older.

Operating expenses increased by a much smaller 3.1% compared to the 8.2% rise in revenues, resulting in operating profit growing by a much larger 19% to $8.5m for 1Q 2012. If not for taxation being 55% higher, VICOM would have been able to register a 19% growth in PAT as well. Instead, PAT grew a very respectable 14.1% which surprised even me as I was expecting a high single digit PAT growth rate.

The Balance Sheet continues to remain clean with no debt, and cash balances once again grew to $60.2m. The fact that Receivables did not grow much in line with revenues shows that this business is cash-based and I do believe that even in instances where credit was extended, it should not be a problem in terms of collectability.

The Cash Flow Statement has now reverted to the baseline capex levels of about $1m for 1Q, now that the new SETSCO facility has been completed. FCF generated for 1Q 2012 was $4.3m, higher than the previous year’s amount of $2.7m.

Assuming this carries on in 2Q 2012, shareholders should be able to enjoy yet another decent interim dividend (1H 2011 interim: 6.9c/share; 1H 2011 interim: 6.3c/share).

Business segment information is no longer available.
Can the CEO maintain the same level of transparancy as the previous CEO? Any trade secret in the numbers?
It would be interesting to find out where the top line growth came from and by how much.

(11-05-2012, 03:08 PM)wsreader Wrote: Business segment information is no longer available.
Can the CEO maintain the same level of transparancy as the previous CEO? Any trade secret in the numbers?
It would be interesting to find out where the top line growth came from and by how much.

there's indeed trade secret in the number. when I attended the agm they said that segmental result actually reveals their setsco profit margin to competitors. comfortdelgro group as a whole is more conservative in this aspect.

Total revenue grows by 8% which is $1.83m. It seemed like both segment is powering the growth at the same time.

Veh Insp Rev
Q1 2011 Q2 2011 Q3 2011 Q4 2011
6968 6790 7112 7363

Looking at the above figures, veh inspection will at most be slightly above the Q4 result which put its at around 7450, representing a 7% increases in revenue. Reason for the jump in Q4 is due to the closure of ayer rajah centre in Aug 2011. It is highly unlikely that veh inspection could have jump to 7600 or beyond.

Therefore, it is likely that SETSCO has grown by 8% too as $1.83m increases is too much for vehicle inspection to do it alone. It has just been the first to be accreditated to do CAMS inspection in Oct 2011. It has also acquired new testing capability in electrical product certification as well as sport flooring inspection.

for the profit margin, the reason might be that they could really have achieved cost saving from the completion of the new HQ at Teban Garden. Their staff cost which accounts for 60% of the total operating expense only increases by 0.4%.

(11-05-2012, 03:36 PM)shanrui_91 Wrote:

(11-05-2012, 03:08 PM)wsreader Wrote: Business segment information is no longer available.
Can the CEO maintain the same level of transparancy as the previous CEO? Any trade secret in the numbers?
It would be interesting to find out where the top line growth came from and by how much.

there's indeed trade secret in the number. when I attended the agm they said that segmental result actually reveals their setsco profit margin to competitors.

It seems a long time to realise setsco business is compettive. Must be nine years since setsco was acquired in 2003. And setsco test anything and everything under the sun that can be tested

I just wonder what posible reason can there be attributed to reducing the segments to two categories and in the process rental income goes the way of the dodo.

http://www.lta.gov.sg/content/dam/lta/Co...3M-Age.pdf

Looking at the age distribution data above , our car fleet continues to age. In Jan 2012, percentage of total car pop thats 6 years and longer is 26.1% compared to 13.1% in Jan 2011. By May 2012, this figure has increased to 31.6%, which is an addition of 5.5%. There's definitely a point where this trend will peak, but it seemed like I have underestimated the extent of the ageing effect.

http://www.lta.gov.sg/content/dam/lta/Co...20Type.pdf

However, it seemed like take-up rate of diesel car remains at around 20 per month despite the beneficial measures implemented since the last Budget. It's going to take some time before diesel car accounts for a larger percentage of the overall car population.

(vested)

Mary Lee Peck Kim replacing Ms. Tam Wui Kuern as Head of Finance, and she's from ComfortDelgro Engineering Pte Ltd.

So is this part of the process in which VICOM's senior management is slowly being replaced by ComfortDelgro? Is a potential privatization offer on the way? Haha......