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it's a disaster of a result.
you strip out the one-off divestment gain and the tax rebate, it's almost a loss making quarter.
there was also an afs loss. will this be the last of the afs loss we will see?
hmm....
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The Group’s revenue is derived largely from project-oriented businesses and as such, quarterly
results would not accurately reflect the full-year’s performance. Full-year to full-year comparisons
are more appropriate for analytical purposes.
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Boustead is certainly a tough nut to crack. After investing in this company for over 10 years, I have to admit that I still dunno how to analyse and have a good feel on the earnings of the company.
That said, its track record remains there and overall their guidance on what to expect has been reliable. Dividends payout has been reasonable and has been growing over time.
FF Wong has always reminded shareholders to look at his track record. Its a statement that only shareholders who have been long term will appreciate.
To be fair, Boustead has its fair share of misses over the years but somehow, perhaps its Boustead's conservatism that helped it sustained through these rough seas. Cash pile remains there and is still growing. Ex cash hoard, cashflow generating assets like industrial properties has been built up and even non equitable listed investments such as Hankore and OMH have been seeded (of course with these submarine investments, shareholders are far from happy since a company should only embark on winning investments).
Back to short term focus, Boustead did say that they expect earnings this year to be better than last year so shareholders should be at ease on this year's outlook. However, with quiet contract flows for months, there remains uncertainty as to where earnings will be flowing through for next FY. Honestly with an uncertain world like we have today, there will be less corporate bosses that dares to commit to another blue sky outlook. Hence perhaps as shareholders and potential investors, we should continue to diligently watch out for indicators that will provide leads on Boustead's outlook.
As a long term holder, I am definitely more confortable with the Boustead of today compared to even 3 years ago. Recurrent earnings is easily S$40m pretax (about S$30m from ESRI and S$10m from its small but stable industrial property portfolio) without the project based businesses. Bear in mind that these two businesses are cash generating business and keeps adding to the growing cash hoard in Boustead.
With a growing cash hoard, property holdings and small leaders in some niche engineering field, there are plenty of options in which Boustead can unlock shareholders wealth if they so wish to pursue. In addition, there is also transformation that Boustead and FF is always talking about in potentially creating new earnings stream. So the choice is yours - in it or look for other fishes in the ocean.
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