Kingsmen Creatives

Against an overall weak market today (15May12), Kingsmen has been marked up back to $0.67 - up $0.02 from yesterday's closing price - even though the counter has gone 'XD' since 8May12 for the $0.025/share Final dividend for FY11. Such price movement is rather unusual! I think shareholders better hold on to your Kingsmen share tight, tight!

Don't say that after Adampak, it is Kingsmen turn.

Looking at the trades in Kingsmen's shares done in the last 25 minutes of today's session on the SGX ................ it looks like there was one buyer of 88,000 shares (a Chinese buyer perhaps?) from two sellers at the S$ 0.655 level and (only) 10,000 shares traded soon afterwards at the S$ 0.67 level - nothing in between. I nibbled at a price of S$ 0.645 this morning, with some success, although it was only a PFILL. I note there were zero trades done between just before noon and 16.35 hours.

I know I am guilty of looking at specific trades but I wonder if this time a single, perhaps suprious, ten (10) lot trade is leading us to false conclusions. That said ..... dydx has a knack of calling these things correctly!

Vested

(15-05-2012, 05:04 PM)cyclone Wrote: Don't say that after Adampak, it is Kingsmen turn.

(15-05-2012, 04:49 PM)dydx Wrote: Against an overall weak market today (15May12), Kingsmen has been marked up back to $0.67 - up $0.02 from yesterday's closing price - even though the counter has gone 'XD' since 8May12 for the $0.025/share Final dividend for FY11. Such price movement is rather unusual! I think shareholders better hold on to your Kingsmen share tight, tight!

Personally, I won't get too excited about the apparent surge in the share price. As RBM has kindly pointed out, the transactions were made in two blocks, one of 88 lots and another of 10 lots. Admittedly the 10-lot block was transacted at 3 bids above the last done at $0.67, but it could be the case of desperation by the buyer as the closing bell was near. We should not read too much into the actions of individual (and probably retail) buyers.

My conservative view is that there should be no significant corporate action on Kingsmen for quite some time, allowing for them to (hopefully) realize their vision of doubling revenue by 2015 (using 2010 as a base).

While it is difficult to predict the timing of a privatisation GO, it could just happen when an acceptable suitor makes a good offer and either Ben Soh or Simon Ong is moved and nudges the other into accepting it, with the help of a persuasive advisor or middleman likely from outside. This is how some M&A deals are done. What we know is that Kingsmen is quite 'ripe' for such a deal to happen.

Robinsons is opening at Heeren. They are one of Kingsmen's clients.

The Straits Times
May 16, 2012
Robinsons to open store at The Heeren
Flagship store leaving The Centrepoint after nearly 3 decades there

By Amanda Tan

ROBINSONS' largest store is moving to The Heeren after spending nearly three decades as a familiar landmark at The Centrepoint.

The local department store will open its largest outlet at The Heeren next year, after it inked a 'long-term' lease deal to take over the premises. It will continue to be at The Centrepoint until its lease there ends in 2014.

Robinsons has branches in Raffles City and the Marina Bay Sands, which opened last year. Next year, it will open its first suburban outlet at upcoming mall Jem in Jurong East.

But Robinsons Orchard at The Heeren will be its largest store at over 150,000 sq ft, spanning five floors and a basement when it opens next year. The current site in The Centrepoint, about 300m away, is 130,000 sq ft.

The Heeren, which has seen troubled times since restaurant Marche and music retailer HMV moved out in 2006 and 2009, will get a major overhaul in the third quarter of this year.

Funds will be pumped in by its owners Swee Cheng Holdings, as well as The Robinsons Group of Stores, which is putting in $40 million.

The 154-year-old department store will take up nearly all the space available, but the building will also host three or four food and beverage outlets run by other operators.

Mr Jim McCallum, Asia head for the Robinsons Group, told The Straits Times yesterday that the company is 'delighted to secure the new site', given its strategic location where human traffic and visibility are high.

'The aim and the purpose is to ensure that the brand and the business develop and survive in a changing retail scene. We're able to trade from 150,000 sq ft of retail over five floors in the new location... something we have not been able to do as efficiently where we presently are,' he added, even as he noted 'The Centrepoint is synonymous with Robinsons'.

Still, he acknowledged it is a 'matter of some regret' that the store cannot develop at The Centrepoint due to 'physical constraints' and 'commercial priorities of the landlord there'.

Some 300 jobs will also be created with the opening of this outlet and the one at Jem, he said.

Shoppers can look forward to a bigger home products department as well as some 20 new-to-market brands.

Property consultant Nicholas Mak said such a move could help rejuvenate The Heeren, which was once a popular hangout for young people.

Earlier this month, it was reported that The Heeren had below 10 tenants. The rest of the mall was boarded up.

But it could prove slightly risky for Robinsons, said Mr Mak, head of research at SLP International Property Consultancy. 'It will have to draw in shoppers based on its own merit whereas at The Centrepoint, shoppers could be drawn in by other shops.'

Still, rent may be less at the new site. 'The landlord needs someone to take over... Having a brand name means it must give an attractive rent,' he said, adding that this can be adjusted in a few years, based on Robinsons' performance and market conditions.

A Frasers Centrepoint spokesman said plans for The Centrepoint will be announced in due course.

One shopper, Madam Koh Beng Hong, 59, a housewife, said she will 'definitely visit the new store'.

'I don't mind the move as they are just moving nearby... It's still in Orchard Road,' she said.

tamanda@sph.com.sg

Just checked my bank account and am very pleased to receive Kingsmen's 2.5c/share final dividend today. Great reason to go watch a nice movie and bring my family for a nice meal this weekend!

I look forward to Kingsmen's 1H 2012 results to be released some time in August 2012, where they should declare an expected interim dividend of 1.5c/share (1H FY 2011 1.5c/share), to be paid out in Sep 2012.

$$$$

Kaching

Thank you for bringing my attention to this great stock

Trying to stand back from recent marked market price drops ........ I can't help noting and being pleased with the sustained resilience of Kingsmen Creative's share-price.

Before it went XD on 8th May 2012, a time that approximately co-incided with the commencement of a marked downturn in overall Asia Pacific market performance, Kingsmen's share price touched a 52-week high of S$ 0.695. As Musicwhiz observed at the time, there may well have been some "dividend hunting" driving the price up; I plagiarise MW's words.

Kingsmen's "last done" share price yesterday was S$ 0.66 - a few low-volume trades as low as S$ 0.64 were done a week or so ago but thats about as low as it has gotten in the last couple of weeks. Taking into account the S$ 0.025 dividend payment, the share price is clearly proving resilient and is now - in effect - only one S$cent below its 52 week high.

I also note that Pico Far East's share price has recovered from trading in the mid HK$ 1.60's in mid May - and recovered in an overral heavily declining Hong Kong market, now hovering in the mid HK$ 1.80's. I believe it is fair to say Pico is the nearest comparator company to Kingsmen within the Asia Pacific region.

It is difficult for me to believe that Kingsmen and Pico operate in a field which is now "downturn-proof" or more "downturn resilient" than nearly all retail stocks for example. I know both companies have pretty strong order books but maintaining their (rather decent) margins will surely be a challenge going forward unless Asian economic growth picks up again.

I wonder if Mr. Market is at last rewarding companies with first class focused managements who reward their shareholders year-in-year-out with more-than-decent dividend flows? Or have expectations regarding IH 2012 results risen? (we'll know in a couple of months time) ..........or may be dydx's corporate action hunch is spot-on vis-a-vis Kingsmen (reference dydx's 4th May 2012 posting on this thread)?

Vested - in both Kingsmen Creatives and Pico Far East

(09-06-2012, 05:08 PM)RBM Wrote: Before it went XD on 8th May 2012, a time that approximately co-incided with the commencement of a marked downturn in overall Asia Pacific market performance, Kingsmen's share price touched a 52-week high of S$ 0.695. As Musicwhiz observed at the time, there may well have been some "dividend hunting" driving the price up; I plagiarise MW's words.

Kingsmen's "last done" share price yesterday was S$ 0.66 - a few low-volume trades as low as S$ 0.64 were done a week or so ago but thats about as low as it has gotten in the last couple of weeks. Taking into account the S$ 0.025 dividend payment, the share price is clearly proving resilient and is now - in effect - only one S$cent below its 52 week high.

It is difficult for me to believe that Kingsmen and Pico operate in a field which is now "downturn-proof" or more "downturn resilient" than nearly all retail stocks for example. I know both companies have pretty strong order books but maintaining their (rather decent) margins will surely be a challenge going forward unless Asian economic growth picks up again.

Haha, well I think companies like Kingsmen with resilient earnings and steady FCF will be able to attract sufficient buying interest to ensure the share price remains steady; to the detriment of those who wish to increase their stake! I've been waiting for a comfortable level to increase my position but it has been futile so far.....haiz.

While it is true that it is now trading close to its 52-week high, valuations are still considered "fair" as there is currently too much uncertainty to have further clarity on the business. Although I must add - investing always carries with it a certain level of uncertainty; it just depends on how comfortable we are managing the unknowns and protecting our downside should the business suffer a serious/major structural deterioration.

On your comment about Pico and KC's business being "recession-proof", I would agree that it is not entirely so. The last major GFC was due to USA suffering, which led to monies flowing into SEA and thus boosting Pico's and KC's businesses which are predominantly Asian-based. If you take a look at the current crisis, it is centred around Europe and so Kingsmen should not be materially affected unless the crisis becomes so severe that demand is crimped in SEA and many retailers/event organizers start pulling out of the region. On the contrary, the opposite has been true - more and more international labels have been setting up flagship stores throughout SEA (including HK, China and Singapore), while many events are still hosted here - the MICE industry remains vibrant. Last week, Singapore even announced that a new Kidzania theme park was to be built on Sentosa, while Uniqlo will be opening its new store at the former Iluma mall in Bugis! So it looks like business as usual, for now.

If the next crisis should affect China and the rest of SEA, then Pico and KC may be affected and I foresee that revenues/profits would drop. But the business having little inventory and working capital requirements should still see decent FCF being generated.

I would think that with KC's strong balance Sheet and good FCF, there should not be a problem paying an interim dividend of at least 1.5c/share for 1H FY 2012. Of course, I'd hope for more, but if they maintain it I would be happy.