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Taken from the coy's announcments:
"The Company and together with its subsidiaries (the “Group”) intends to use the Land for a Materials Recovery Facility (“MRF”) plant for the recovery of recyclables. The Land will also be utilised as a
vehicle depot, for storage of materials and equipments as well as for the maintenance of the Group’s vehicles."
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Altogether, the 3 plots of land which they tendered successfully for costs a total of $ $15.8m. Perhaps that explains why cash and cash equivalents dropped from $11.45m in FY2012 to $5.87m in HY2013. From the announcements, it was stated that they have 90 days from the date of award (September 2012) to pay the full sum. So the full payment would have to be made by December 2012.
It's already March 2013 now, and they have yet to call for a rights issue. Their borrowings increased from $5.08m to $12.84m in the meantime. Judging from the decreased cash of $5.58m and increased borrowings of $7.76m, coupled with some cashflow from operations (FCF of $7.88m in 2012), I suppose they were able to finance their acquisition without the need for a cash call. However, I still think that they will need money to design and build the proposed Materials Recovery Facility.
Supper 800 is currently trading at a 9% premium to book, a PE of 5.85 and current ratio of 2.0 (still rather financially solvent).
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lavue Wrote:Altogether, the 3 plots of land which they tendered successfully for costs a total of $ $15.8m. Perhaps that explains why cash and cash equivalents dropped from $11.45m in FY2012 to $5.87m in HY2013. From the announcements, it was stated that they have 90 days from the date of award (September 2012) to pay the full sum. So the full payment would have to be made by December 2012.
It's already March 2013 now, and they have yet to call for a rights issue. Their borrowings increased from $5.08m to $12.84m in the meantime. Judging from the decreased cash of $5.58m and increased borrowings of $7.76m, coupled with some cashflow from operations (FCF of $7.88m in 2012), I suppose they were able to finance their acquisition without the need for a cash call. However, I still think that they will need money to design and build the proposed Materials Recovery Facility.
Supper 800 is currently trading at a 9% premium to book, a PE of 5.85 and current ratio of 2.0 (still rather financially solvent).
Recent week saw their share price going upwards.
Seems like accumulation going on, yet there is no news posted on SGX.
Also in the pipe line is the renewal of contract for waste management due to expire this year.
Hence my conclusion is either:
A. Ram up for a rights issue; or
B. Contract coming in...
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The bids for the tender has been on gebiz for about a month now. 800 super has put in the lowest bid for the amk-tpy contract; it is likely they will win the bid. The runner-up bid that is $5m higher came from colex. An announcement regarding the contract's winner should be made before the end of the month.
The last public refuse collection contract (yishun-Sembawang) is up for tender and will close in about two months time. If 800 super wins this contract, which serves a much bigger population than amk-tpy, they could see a break through in their npat. It should be announced by early 2014, if sembwaste is still the incumbent refuse collector for yishun-Sembawang.
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In February 2014 they announced they bagged a $97.3m integrated public cleaning contract for north-west region of Singapore. It is a six year contract awarded by NEA, commencing from 1 April 2014.
In July 2014 they announced they bagged another $204.9m integrated public cleaning contract for the south-west region of Singapore, again from NEA, for a period of 7 years commencing from 1 September 2014.
With these two major contracts anchoring them through 2020 and providing earnings visibility, it appears that investors are starting to nibble at their shares. They have also acquired a JTC property in Sungei Kadut, ostensibly to support their operations in the north and south-west of Singapore. I think this is a prudent operating decision and will help them reap the economies of scale.
800 Super announced a 18% year-on-year increase in revenue and a whooping 57% year-on-year increase in profit after tax. Perhaps that explains why the share price shot up by 20% from a range bound $0.25 to $0.30 today.
At a PE of 6, with costs under control and earnings set to grow further, will the share price see an upward bias? Perhaps the statement from Chairman Lee sums it up nicely: "delivering strong results in FY2014 despite tight competition in the market and an increase in costs due to higher worker levy and wages.. continue to manage operations to provide service quality, delivery and pricing so as to deliver value to stakeholders".
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There were 3 major contracts that was announced within the last 12 months. Apart from the 2 contracts mentioned by lavue, there was the re-award of the TP-AMK contract in Aug 2013.
The TP-AMK is 7yrs with a value of $160.6M. (Start Date Jan 2014)This re-award must be compared with the old contract that was $94.7m for 7 yrs. Assuming work scope is similar, the new contract has a re-pricing effect from $12.6m/yr to $ 20.7m/yr.
On a total revenue basis $8m more per year may seem unimpressive. However I would venture that on a profit basis, $8m more per year in the same area will contribute very favourably to profit. If we assumed the same cost base for 1H14 & 2H14 for TP-AMK, then in 2H14, the profit will see a surge due to the re-award pricing, $4m more straight to bottom line(pardon my simplistic calculation). Perhaps this could have played a big part in why profit in 1H14 was $2.3m & 2H14 was $6.7m?
Since 800 Super is a recurring based biz, we could reasonably annualised its 2H14 EPS to 7.6cts. At the current price of $0.31, PE is 4X. This is excluding the effects of the other 2 major contracts that will kick in fully in FY15.
The Staff Cost/Rev % seems to have also stablised. Over the last 5 years, it is 36%, 39%, 40.7%, 44.7% and 46.6% (FY14). In fact for both halves of FY14, it hovers around 46%, an indication that staff cost per pax is not continuing to escalate. All the foreign workers levy increment had also been reflected in Other Expenses.
(vested)
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800 Super is touching a high of $0.43 currently on a volume of 2.7m shares exchanging hands.
Compared to its range bound price of $0.25 just a few weeks ago, things really can change in the blink of an eye eh? This represents a gain of >70%!
Something brewing?
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Yes, waiting for some announcement.
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(09-09-2014, 04:14 PM)crosscalibre Wrote: Yes, waiting for some announcement.
I had earlier taken a look at this counter (when it was at 24 cents) but decided not to invest which clearly was a mistake.....  . I was attracted to the business because I believe that trash can only be a long term positive business in Singapore given the Government's policy to grow the population. However, what made me decide against investing was the fact that such a high percentage of labour / sub-contractor costs (around 45% of revenues per the 2012 annual report). Seems to me that this is a highly labour intensive business and that will be continuously under pressure from increases in wages or government levies.
Does anyone have a view on this ? Can the business be more automated to counter wage pressure ?
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(09-09-2014, 04:32 PM)GreedandFear Wrote: (09-09-2014, 04:14 PM)crosscalibre Wrote: Yes, waiting for some announcement.
I had earlier taken a look at this counter (when it was at 24 cents) but decided not to invest which clearly was a mistake...... I was attracted to the business because I believe that trash can only be a long term positive business in Singapore given the Government's policy to grow the population. However, what made me decide against investing was the fact that such a high percentage of labour / sub-contractor costs (around 45% of revenues per the 2012 annual report). Seems to me that this is a highly labour intensive business and that will be continuously under pressure from increases in wages or government levies.
Does anyone have a view on this ? Can the business be more automated to counter wage pressure ?
Agree with you on its business. My view is that the cost will eventually be passed down to the government or consumers in the long term in contract renewals. it is one of the bigger players in the market too.
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