VICOM

[camelking]

Mary Lee Peck Kim replacing Ms. Tam Wui Kuern as Head of Finance, and she's from ComfortDelgro Engineering Pte Ltd.

So is this part of the process in which VICOM's senior management is slowly being replaced by ComfortDelgro? Is a potential privatization offer on the way? Haha......

no, it is not.
She used to work with the current CEO of Vicom when he was CEO of comfortdelgro eng.
No such things as vicom and comfortdelgro management. They are all under comfortdelgro. It is all centralised under iron fist control.

[shanrui_91]

it is normal for a new CEO to replace certain position with people that he has been working with or that he trusted. For e.g. there are some DFS people inside SMRT.

However, for Ms Tam to resign instead of transferring to other department might signal some conflict ongoing with the new CEO. Or it could also be that she is retiring since she seemed to be in her 40s or 50s.

新官上任三把火, New CEO will bring about some form of changes which requires shareholder to put in a bit more effort. For e.g. hiding of segmental result for Q1 reflects his concern about competitors reading their results. The most important thing to observe for Q2 will be the dividend paid. That can imply that VICOM might be undergoing some transformation, be it for better or worse.

Care to share more about the iron fist control in comfortdelgro?

(vested)

[camelking]

it is normal for a new CEO to replace certain position with people that he has been working with or that he trusted. For e.g. there are some DFS people inside SMRT.

However, for Ms Tam to resign instead of transferring to other department might signal some conflict ongoing with the new CEO. Or it could also be that she is retiring since she seemed to be in her 40s or 50s.

新官上任三把火, New CEO will bring about some form of changes which requires shareholder to put in a bit more effort. For e.g. hiding of segmental result for Q1 reflects his concern about competitors reading their results. The most important thing to observe for Q2 will be the dividend paid. That can imply that VICOM might be undergoing some transformation, be it for better or worse.

Care to share more about the iron fist control in comfortdelgro?

(vested)

Sorry...can't disclose too much.
By the way, on the privatisation, I doubt they will do it at current price IF they are indeed interested in doing so.
The share price has gone up so much. So, may not be worth while to take it private.
Of course, i got it totally wrong. haha!

[Musicwhiz]

VICOM has just announced that it would release its 1H 2012 results on August 10, 2012 (Friday).

With a strong cash position as at March 31, 2012 of $60.1m, and with strong FCF generation of $4.2m in 1Q 2012, it should not be unreasonable to expect a decent interim dividend. Contrast this with 1Q 2011 FCF generation of $2.8m and cash balance of $53.1m.

Would the dividend this time be better than the 6.9c/share interim dividend which VICOM paid for 1H 2011? Let's wait and see.

(Vested)

[ValueFund]

I'll rather Comfort Delgro privatise it at $5.00 than a dividend.

[Musicwhiz]

I'll rather Comfort Delgro privatise it at $5.00 than a dividend.

What's the incentive for Comfort to do that?

[Musicwhiz]

VICOM will be releasing their 1H 2012 results on August 10, 2012 (Friday).

A quick recap: 1Q 2012 revenues up 8.2% to $24.3m, NPAT $7m up 14% yoy from $6.1m. Cash balance of $60.1m as at March 31, 2012 (no debt). 1Q 2012 OCF generated = $5.3m; FCF of $4.3m. As at Dec 31, 2011, cash balance of $55m. 1Q 2011 OCF generated $4.9m; FCF of $2.8m.

Final and Special Dividends paid on May 14, 2012 of 10.7c/share, equivalent to about $9.4m.

As a comparison, 1H 2011 revenues of $44.7m, up +8% yoy from $41.4m. NPAT of $12m up +10.5% yoy from $10.9m. Net cash of $44m as at June 30, 2011. 1H 2011 OCF generated = $9.8m; FCF of $2.2m.

Last year’s interim dividend was 6.9c/share. Should be expecting a slightly higher interim dividend of maybe 7c or 7.1c/share, assuming NPAT for 1H 2012 can grow about 10% yoy.

[cif5000]

Interim dividend of 7.5ct. Not coming down huh!

Wait for LTA to announce that MRT is now classified as a vehicle. Independent inspection required!

[FFNow]

Last year’s interim dividend was 6.9c/share. Should be expecting a slightly higher interim dividend of maybe 7c or 7.1c/share, assuming NPAT for 1H 2012 can grow about 10% yoy.

MW, you got more than you wished for!

[Musicwhiz]

MW, you got more than you wished for!

Haha, yes indeed.

Interestingly, the dividend has tracked the growth of VICOM's NPAT, which increased 11% in 1H 2012. A 0.6c increase in the interim dividend corresponds to an 8.6% increase in dividend. EPS was 15.11c for 1H 2012, so the interim dividend of 7.5c represents about a 50% payout ratio. This is quite similar to 1H 2011, as EPS then was 13.7c and interim dividend for 1H 2011 was 6.9c, also a 50% payout ratio.

Digging deeper into the financials, VICOM managed to grow its revenue by 7.6% yoy for 2Q 2012, and 8% yoy for 1H 2012. Staff costs grew by an equal 7.6% for 2Q 2012, but for 1H 2012 it only increased 4%. Costs rose faster than revenues for 2Q 2012, resulting in operating profit increasing just 5.5%, less than the increase in revenues. Taxation fell, however, resulting in NPAT for 2Q 2012 increasing 8% yoy.

The balance sheet remains clean with no debt and a cash balance of $55.6m, virtually unchanged even with the payout of the $9.4m final cum special dividend of 10.7c/share for FY 2011. This can be attributed to the strong cash-generation capability of the business, which saw OCF of $5.7m for 2Q 2012 and FCF of $4.7m; while for 1H 2012 OCF of $11m was generated of which $9m was FCF.

The payment of the 7.5c/share interim dividend will drain just $6.6m (based on issued share capital of 88.2m as at June 30, 2012). This should still leave VICOM with enough cash to grow its cash balance further in the coming quarters.