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PR Newswire
31-12-2010, 07:16 AM
Dec 31, 2010
SPH eyes more mall investments
But media remains its core business, says finance chief
SINGAPORE Press Holdings (SPH) is eyeing further investments in real estate, in particular shopping malls that will provide recurring income, but media will remain the firm's core business, its chief financial officer said.
Cash-rich SPH, which has a dominant position in newspaper publishing in Singapore, has been investing in new areas, from outdoor advertising to property.
Apartment sales and rental income accounted for a quarter of SPH's $1.4 billion operating revenue last financial year, and the company is currently building a mall in Clementi that will open early next year.
'We will continue to look at retail opportunities,' Mr Tony Mallek told Reuters in an interview on Wednesday. 'We are still a media company (but) we have a property wing.'
Mr Mallek said SPH preferred malls to residential development because of the recurring revenues.
The company is familiar with retailing, having owned the upmarket Paragon mall in Singapore's Orchard Road shopping belt since 1997.
'Some time in the future, we will look outside of Singapore, but right now we haven't,' he added of the company's foray into real estate.
SPH, which will report fiscal first quarter earnings on Jan 14, had $461 million in cash at the end of its financial year ended August 2010, up from $299 million a year earlier.
Its shares are popular with investors as they offer a dividend yield of 6.8 per cent based on the distribution for financial year 2009/2010 - one of the highest among Singapore-listed blue chips.
Analysts, however, expect dividends will fall slightly in financial year 2010/2011 in the absence of earnings from residential development.
SPH's net profit is forecast to be about $406 million, 18.4 per cent lower than its last financial year that ended in August, based on the average estimate of analysts surveyed by Thomson Reuters I/B/E/S.
Of the 17 analysts tracked by Thomson Reuters I/B/E/S who cover SPH, 10 have a 'hold' recommendation while six are calling a 'buy' on the stock. The last analyst has a 'sell' call.
Mr Mallek said that the company's investments in property and other businesses will not affect its ability to maintain its dividend.
'As CFO, I'm aware we are seen as a yield play... If you look back at our track record, we've not had problems paying a good dividend,' he said.
He added that the company should not be regarded by investors as a mature business and cited magazines as a growth business in Singapore and outside the city state.
'If you go back over the past five to six years, annual turnover has quadrupled from $25 million to $100 million,' he said.
SPH, which publishes The Straits Times, reported a 14 per cent rise in advertising revenue growth in its last fiscal year, helped by a strong recovery in the Singapore economy which is likely to grow by 15 per cent this year.
REUTERS
SPH eyes more mall investments
But media remains its core business, says finance chief
SINGAPORE Press Holdings (SPH) is eyeing further investments in real estate, in particular shopping malls that will provide recurring income, but media will remain the firm's core business, its chief financial officer said.
Cash-rich SPH, which has a dominant position in newspaper publishing in Singapore, has been investing in new areas, from outdoor advertising to property.
Apartment sales and rental income accounted for a quarter of SPH's $1.4 billion operating revenue last financial year, and the company is currently building a mall in Clementi that will open early next year.
'We will continue to look at retail opportunities,' Mr Tony Mallek told Reuters in an interview on Wednesday. 'We are still a media company (but) we have a property wing.'
Mr Mallek said SPH preferred malls to residential development because of the recurring revenues.
The company is familiar with retailing, having owned the upmarket Paragon mall in Singapore's Orchard Road shopping belt since 1997.
'Some time in the future, we will look outside of Singapore, but right now we haven't,' he added of the company's foray into real estate.
SPH, which will report fiscal first quarter earnings on Jan 14, had $461 million in cash at the end of its financial year ended August 2010, up from $299 million a year earlier.
Its shares are popular with investors as they offer a dividend yield of 6.8 per cent based on the distribution for financial year 2009/2010 - one of the highest among Singapore-listed blue chips.
Analysts, however, expect dividends will fall slightly in financial year 2010/2011 in the absence of earnings from residential development.
SPH's net profit is forecast to be about $406 million, 18.4 per cent lower than its last financial year that ended in August, based on the average estimate of analysts surveyed by Thomson Reuters I/B/E/S.
Of the 17 analysts tracked by Thomson Reuters I/B/E/S who cover SPH, 10 have a 'hold' recommendation while six are calling a 'buy' on the stock. The last analyst has a 'sell' call.
Mr Mallek said that the company's investments in property and other businesses will not affect its ability to maintain its dividend.
'As CFO, I'm aware we are seen as a yield play... If you look back at our track record, we've not had problems paying a good dividend,' he said.
He added that the company should not be regarded by investors as a mature business and cited magazines as a growth business in Singapore and outside the city state.
'If you go back over the past five to six years, annual turnover has quadrupled from $25 million to $100 million,' he said.
SPH, which publishes The Straits Times, reported a 14 per cent rise in advertising revenue growth in its last fiscal year, helped by a strong recovery in the Singapore economy which is likely to grow by 15 per cent this year.
REUTERS
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