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(29-06-2012, 06:01 PM)orang Wrote: (29-06-2012, 09:51 AM)freedom Wrote: the ar2012 is out.
it seems that the company is building inventories in anticipation of higher price in the future. the chairman also explained the principal-agent problem between The Hour Glass and its brand owners.
in its receivable, I noticed that they received compensation from dropping dealership with one brandin certain territories. So the principal has been taking some distribution right back from the Hour Glass.
"in anticipation of higher price in the future" sure sounds nice
Somehow inventory seen as a ratio to current assets - 0.76 for the latest fy and 0.74 and 0.68 going back to fy11 and fy10 - makes one feel uneasy. I know I am
The ratios to equity reading - 0.79 - 0.76 - 0.73 just adds on to the concern
The compensation received for dropping dealership being treated so casually in the receivables just seems not right, the amount piffling notwithstanding
(vested interest but thinking of jumping ship)
Always look forward and get wet from reading Henry Tay's Chairman Statement - so many insights shared.
Particularly impressed by: "The executive committee and I spend many hours debating the compensation and welfare of our team members, especially ensuring that those at entry level positions in the company can take home enough to comfortably support themselves and their families." Having worked for some years, I do not think many managements make such an effort.
My only axe to grind is is the company too debt-conservative. Rolling over the S$11m debt instead of repaying will not hurt/threaten the company in any way. Even if i/r skyrockets to 5%, that will only be interest expense of S$500k/year vs EBITDA of S$74m/year. Even if EBITDA drops sharply to S$25m, the interest expense is nothing vs EBITDA. Yet if that $11m has been used to paid dividends, dividends could almost double!!
I hope some forumers who agree on HG being overly debt-conservative can raise this at the AGM. I do of course hope to be able to make it for the AGM.
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30-06-2012, 10:35 AM
(This post was last modified: 30-06-2012, 11:04 AM by Boon.)
(30-06-2012, 10:01 AM)Choon Wrote: (29-06-2012, 06:01 PM)orang Wrote: (29-06-2012, 09:51 AM)freedom Wrote: the ar2012 is out.
it seems that the company is building inventories in anticipation of higher price in the future. the chairman also explained the principal-agent problem between The Hour Glass and its brand owners.
in its receivable, I noticed that they received compensation from dropping dealership with one brandin certain territories. So the principal has been taking some distribution right back from the Hour Glass.
"in anticipation of higher price in the future" sure sounds nice
Somehow inventory seen as a ratio to current assets - 0.76 for the latest fy and 0.74 and 0.68 going back to fy11 and fy10 - makes one feel uneasy. I know I am
The ratios to equity reading - 0.79 - 0.76 - 0.73 just adds on to the concern
The compensation received for dropping dealership being treated so casually in the receivables just seems not right, the amount piffling notwithstanding
(vested interest but thinking of jumping ship)
Always look forward and get wet from reading Henry Tay's Chairman Statement - so many insights shared.
Particularly impressed by: "The executive committee and I spend many hours debating the compensation and welfare of our team members, especially ensuring that those at entry level positions in the company can take home enough to comfortably support themselves and their families." Having worked for some years, I do not think many managements make such an effort.
My only axe to grind is is the company too debt-conservative. Rolling over the S$11m debt instead of repaying will not hurt/threaten the company in any way. Even if i/r skyrockets to 5%, that will only be interest expense of S$500k/year vs EBITDA of S$74m/year. Even if EBITDA drops sharply to S$25m, the interest expense is nothing vs EBITDA. Yet if that $11m has been used to paid dividends, dividends could almost double!!
I hope some forumers who agree on HG being overly debt-conservative can raise this at the AGM. I do of course hope to be able to make it for the AGM.
The Chairman's statement is very insightful, it hightllights the importance in reading Annual Reports.
Debt/Equity (%)
FY 2008 : 8.8%
FY 2009 : 8.5%
FY 2010 : 6.6%
FY 2011 : 5.7%
FY 2012 : 1.0%
The debt/equity ratio used to be above 5%. I guess when the need arises, it would probably go up again.
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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30-06-2012, 10:48 AM
(This post was last modified: 30-06-2012, 10:51 AM by freedom.)
even HG saves the 11 million from debt repayment, I doubt, it would go to shareholders. Historically, I don't view HG as a generous dividends giver. 2007-2008 is a bit different, maybe they were trying to utilize their S44 tax credit(my guess only).
(29-06-2012, 11:30 AM)shanrui_91 Wrote: Quote:in its receivable, I noticed that they received compensation from dropping dealership with one brand in certain territories. So the principal has been taking some distribution right back from the Hour Glass.
This was an agreement dating back to annual report FY 2004:
"The Company has exclusive distribution agreements in respect of a principal in the Asia Pacific region.
During the year, the exclusive distributorship rights were revised to exclude certain territories countries in the Asia Pacific region. As a goodwill compensation for removing these countries from the originally defined territories, the principal agreed to pay the Company, an amount of CHF2 million ($2.7 million). The Company received CHF 250,000 ($337,000) during the year, with the balance amount of CHF1.75 million ($2,363,000) being recorded as a net receivable as at 31 March 2004 "
my point is that brands are taking back their dealership and of course, The Hour Glass is also dropping some brands.
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(29-06-2012, 06:01 PM)orang Wrote: (29-06-2012, 09:51 AM)freedom Wrote: the ar2012 is out.
it seems that the company is building inventory in anticipation of higher price in the future. the chairman also explained the principal-agent problem between The Hour Glass and its brand owners.
in its receivable, I noticed that they received compensation from dropping dealership with one brandin certain territories. So the principal has been taking some distribution right back from the Hour Glass.
"in anticipation of higher price in the future" sure sounds nice
Somehow inventory seen as a ratio to current assets - 0.76 for the latest fy and 0.74 and 0.68 going back to fy11 and fy10 - makes one feel uneasy. I know I am
The ratios to equity reading - 0.79 - 0.76 - 0.73 just adds on to the concern
The compensation received for dropping dealership being treated so casually in the receivables just seems not right, the amount piffling notwithstanding
(vested interest but thinking of jumping ship)
On inventory, another useful indicatior is the Stock Turn Ratio:
Stock Turn Ratio :
FY 2008 : 2.6
FY 2009 : 2.4
FY 2010 : 2.4
FY 2011 : 2.1
FY 2012 : 2.0
A low turnover rate may indicates an inefficient management of inventory : overstocking or over-investment in inventory; accumulation of obsolete and slow moving goods; dull business etc.
In some instances a low rate may be appropriate, such as where higher inventory levels occur in anticipation of rapidly rising prices or shortages. This seems to be the case as explained by the Chairman.
Overall the turnover rate has been trending lower but was for good reason. What impressed me most is net profit margin has been trending upwards from the low of 6.3% (2009) to 9.4% (2012).
Net margin :
FY 2008 : 6.5%
FY 2009 : 6.3%
FY 2010 : 6.9%
FY 2011 : 8.3%
FY 2012 : 9.4%
(Not Vested)
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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(30-06-2012, 11:28 AM)Boon Wrote: What impressed me most is net profit margin has been trending upwards from the low of 6.3% (2009) to 9.4% (2012).
Net margin :
FY 2008 : 6.5%
FY 2009 : 6.3%
FY 2010 : 6.9%
FY 2011 : 8.3%
FY 2012 : 9.4%
How did you get NPM = 6.3% for FY09? From FY09 financials,
Total Revenue = $441,908,000
Profit = $13,436,000
Profit Margin = 3.04%
Thx!
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(30-06-2012, 12:50 PM)KopiKat Wrote: (30-06-2012, 11:28 AM)Boon Wrote: What impressed me most is net profit margin has been trending upwards from the low of 6.3% (2009) to 9.4% (2012).
Net margin :
FY 2008 : 6.5%
FY 2009 : 6.3%
FY 2010 : 6.9%
FY 2011 : 8.3%
FY 2012 : 9.4%
How did you get NPM = 6.3% for FY09? From FY09 financials,
Total Revenue = $441,908,000
Profit = $13,436,000
Profit Margin = 3.04%
Thx!
my guess is to add back the exceptional item related to GemTV?
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(30-06-2012, 11:28 AM)Boon Wrote: (29-06-2012, 06:01 PM)orang Wrote: (29-06-2012, 09:51 AM)freedom Wrote: the ar2012 is out.
it seems that the company is building inventory in anticipation of higher price in the future. the chairman also explained the principal-agent problem between The Hour Glass and its brand owners.
in its receivable, I noticed that they received compensation from dropping dealership with one brandin certain territories. So the principal has been taking some distribution right back from the Hour Glass.
"in anticipation of higher price in the future" sure sounds nice
Somehow inventory seen as a ratio to current assets - 0.76 for the latest fy and 0.74 and 0.68 going back to fy11 and fy10 - makes one feel uneasy. I know I am
The ratios to equity reading - 0.79 - 0.76 - 0.73 just adds on to the concern
The compensation received for dropping dealership being treated so casually in the receivables just seems not right, the amount piffling notwithstanding
(vested interest but thinking of jumping ship)
On inventory, another useful indicatior is the Stock Turn Ratio:
Stock Turn Ratio :
FY 2008 : 2.6
FY 2009 : 2.4
FY 2010 : 2.4
FY 2011 : 2.1
FY 2012 : 2.0
A low turnover rate may indicates an inefficient management of inventory : overstocking or over-investment in inventory; accumulation of obsolete and slow moving goods; dull business etc.
In some instances a low rate may be appropriate, such as where higher inventory levels occur in anticipation of rapidly rising prices or shortages. This seems to be the case as explained by the Chairman.
Overall the turnover rate has been trending lower but was for good reason. What impressed me most is net profit margin has been trending upwards from the low of 6.3% (2009) to 9.4% (2012).
Net margin :
FY 2008 : 6.5%
FY 2009 : 6.3%
FY 2010 : 6.9%
FY 2011 : 8.3%
FY 2012 : 9.4%
(Not Vested)
I am not used to looking at numbers this way. They are bright numbers.
However I did look at the inventory/revenue ratio as follow:
FY 2010 32.9
FY 2011 36.9
FY 2012 38.0
and they look dull
Ok maybe you are looking at Fuji apples and I am looking at Australian apples. Still apples right?
The chairman draws .....I do not the figure but collectively the four executive directors draw $7.8m in remuneration for the latest FY2012 and like all top honchos have to justify their keep.
As an investor I have to watch my own "backside" so have to watch where I put my dollar.
The chairman says corporate networth has increased by $43.6m to $293m which is the equity.
I see inventory tracking equity increasing by $40m to $231m. It is not a one-off thing. What is of more concern is the three-quarters of the net worth of the entity is in the stocks.
It is more of an inherent concern.
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(30-06-2012, 01:02 PM)freedom Wrote: (30-06-2012, 12:50 PM)KopiKat Wrote: (30-06-2012, 11:28 AM)Boon Wrote: What impressed me most is net profit margin has been trending upwards from the low of 6.3% (2009) to 9.4% (2012).
Net margin :
FY 2008 : 6.5%
FY 2009 : 6.3%
FY 2010 : 6.9%
FY 2011 : 8.3%
FY 2012 : 9.4%
How did you get NPM = 6.3% for FY09? From FY09 financials,
Total Revenue = $441,908,000
Profit = $13,436,000
Profit Margin = 3.04%
Thx!
my guess is to add back the exceptional item related to GemTV?
Thx! If so, it does make the NPM look good ! Will have to be more hardworking in my analysis if I plan to invest for the longer term! 
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(30-06-2012, 02:20 PM)KopiKat Wrote: (30-06-2012, 01:02 PM)freedom Wrote: (30-06-2012, 12:50 PM)KopiKat Wrote: (30-06-2012, 11:28 AM)Boon Wrote: What impressed me most is net profit margin has been trending upwards from the low of 6.3% (2009) to 9.4% (2012).
Net margin :
FY 2008 : 6.5%
FY 2009 : 6.3%
FY 2010 : 6.9%
FY 2011 : 8.3%
FY 2012 : 9.4%
How did you get NPM = 6.3% for FY09? From FY09 financials,
Total Revenue = $441,908,000
Profit = $13,436,000
Profit Margin = 3.04%
Thx!
my guess is to add back the exceptional item related to GemTV?
Thx! If so, it does make the NPM look good ! Will have to be more hardworking in my analysis if I plan to invest for the longer term!
NPM of 6.3% for 2009 is found on page 10 of AR2012
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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(30-06-2012, 03:11 PM)Boon Wrote: NPM of 6.3% for 2009 is found on page 10 of AR2012
Thx! I was very impressed by your post as I thot' you'd worked out all those figures to analyse. 
Ok, went to check AR12, got the tiny notes for NPM,
3 Excluding impairment loss on investment security.
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