BBR Holdings

[dydx]

Today (19Mar12), BBR bought back another 50 lots and paid $0.245/share, guiding the share price - being quoted on a cum-dividend basis till 6May12, inclusive a $0.008/share Final dividend for FY11 - higher.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument
With only a total of 91 lots done today, BBR actually touched a high of $0.25 before closing at $0.245, meaning that there are willing investors out there who are prepared to pay a little higher.

[RBM]

BBR posted their 2011 Annual Report yesterday. A good read. I liked the information on BBR's ongoing projects ("Project Gallery"), the information on their order book and the Financial Highlights on page 15, which provided a nice reader-friendly comparison of key indicators over the last 5 years. Interesting that this ~ S$ 73 Million market-cap company has about 10,600 shareholders. BBR's Top 20 Shareholder list is also interesting, including Tiong Woon Crane, TYT, Ryobi-Kiso (for payments in kind I wonder??!!).

I am a tad concerned at BBR's rising debt level. Net D to E now stands at 58%. Last time when debt levels soared - admittedly to higher levels than 58% - BBR got itself into a pickle. No dividends, supressed share price etc. While I believe CEO Andrew and his management team are doing a seriously good job steering BBR at the moment, this troubles me a bit.

Am I wrong to be worried?? I appreciate that BBR's income stream can be "lumpy" and sale of a couple more Nassim Hill apartments could bring this nearer or even below 50% - but I would appreciate opinions of other forummers. I view BBR as (very) well managed and its share price has the upside of a) trading on an (unjustifiably) much lower P/E than most of its construction peers, b) trading at a ~ 25% discount to its NAV and c) the backing of a solid long-term order book. I just hope they are not over-stretching themselves (again).

Vested,

[dydx]

I won't lose sleep on BBR's current debt level, for 3 reasons:
1. Nassim Hill (under 48%-owned Tennessee P/L) is completed and presumably debt-free as the company paid out a nice dividend to BBR. Where necessary, BBR could always mark down the price and sell off the remaining units, and quite a lot more cash can be upstreamed.
2. Lush on Holland Hill is nearly fully sold and will reach TOP in 2013, so the related bulk sales proceeds plus profits should come in soon and nicely.
3. The latest 140-unit Bliss@Kovan is substantially sold on a profitable basis and scheduled for completion in 2015, and we can expect going forward the related construction costs will be substantially matched by incoming progress payments from those pre-sold units.

Indeed, BBR is a nice and well-managed mid-sized construction group with a limited residential property exposure.

[RBM]

Thank you dydx - much appreciated - your input on this is valuable and reassuring,

On a related matter ..... there were some rumours - I stress rumours only - in the market that BBR was quietly considering a rights issue, a placement or some other form of capital raising. I suspect that these rumours have kept some of the larger potential investors away.

I do feel that BBR is undervalued at its current share price level and I am struggling to understand why it trades on a much lower P/E than most of its construction peers.

Vested

I won't lose sleep on BBR's current debt level, for 3 reasons:
1. Nassim Hill (under 48%-owned Tennessee P/L) is completed and presumably debt-free as the company paid out a nice dividend to BBR. Where necessary, BBR could always mark down the price and sell off the remaining units, and quite a lot more cash can be upstreamed.
2. Lush on Holland Hill is nearly fully sold and will reach TOP in 2013, so the related bulk sales proceeds plus profits should come in soon and nicely.
3. The latest 140-unit Bliss@Kovan is substantially sold on a profitable basis and scheduled for completion in 2015, and we can expect going forward the related construction costs will be substantially matched by incoming progress payments from those pre-sold units.

Indeed, BBR is a nice and well-managed mid-sized construction group with a limited residential property exposure.

[freedom]

don't you feel its dividend is a bit low for its not too high cash requirement since most of its property development business is not going to require additional substantial cash outlay. Unless the management fears the construction can really go very bad, should the management distribute more, especially compared with other listed construction peers?

and I don't feel good about its general construction business. substantially higher(100%) revenue from its general construction business in 2011, but substantially lower profit (30%) compared with 2010.

for PE, if we minus its profit contribution from property development, its PE is well in the range of local construction peers.

[freedom]

Thank you dydx - much appreciated - your input on this is valuable and reassuring,

On a related matter ..... there were some rumours - I stress rumours only - in the market that BBR was quietly considering a rights issue, a placement or some other form of capital raising. I suspect that these rumours have kept some of the larger potential investors away.

I do feel that BBR is undervalued at its current share price level and I am struggling to understand why it trades on a much lower P/E than most of its construction peers.

Vested

I won't lose sleep on BBR's current debt level, for 3 reasons:
1. Nassim Hill (under 48%-owned Tennessee P/L) is completed and presumably debt-free as the company paid out a nice dividend to BBR. Where necessary, BBR could always mark down the price and sell off the remaining units, and quite a lot more cash can be upstreamed.
2. Lush on Holland Hill is nearly fully sold and will reach TOP in 2013, so the related bulk sales proceeds plus profits should come in soon and nicely.
3. The latest 140-unit Bliss@Kovan is substantially sold on a profitable basis and scheduled for completion in 2015, and we can expect going forward the related construction costs will be substantially matched by incoming progress payments from those pre-sold units.

Indeed, BBR is a nice and well-managed mid-sized construction group with a limited residential property exposure.

I am holding an opposite view. Not only that BBR should not do any capital raising exercise, but BBR should and can distribute more of its profit as dividend.

though its gearing is quite high, it is well protected by substantially sold properties as said by dydx, except that its associate is not debt free. its debt will be slowly paid by proceed from sale of properties.

unless of course, it is on something big like requiring hundreds of millions of capital.

[RBM]

Interesting update provided by BBR this evening, in conjunction with an announcement of winning a material construction contract. I attach it below. BBR's order book gets even healthier, now exceeding S$ 555 Million - the challenge that management will continue to face is eeking out a worthwhile margin from this volume.

I'm vested - and I believe the current share price, corresponding to a sub 5 P/E, makes it attractive. The counter is currently trading just above its 52 week low.

QUOTE
BBR lands S$102.7 m deal to construct Phase 1 of Singapore University of Technology and Design at Changi

SINGAPORE, 08 June 2012 – MAINBOARD-LISTED BBR Holdings (S) Ltd (BBR) has won a S$102.7 million contract from the Singapore University of Technology and Design for Phase 1 construction of housing and sports facilities for its campus at Somapah Road and Changi South Avenue 1.

The contract is secured through BBR’s wholly-owned subsidiary Singapore Piling and Civil Engineering Pte Ltd. The scope of works involves the construction of three 11-storey hostel blocks, two 11-storey faculty blocks, a sports complex and a multi-purpose hall with basement car park and support area. Other works include boring and piling foundation works; design and installation of earth retaining systems; construction of link ways, bridges, canopies, rain screens, roads, drainage works, bio-pond, and landscaping; and mechanical and electrical service trenches. External sports facilities include a basketball court, tennis courts, football field with running tracks, a long and triple jump pit and installation of rock climbing apparatus to the sports complex.

The work is broken down into two Phases: A and B. Work will start on 20 June 2012 and Phase A, which will see the completion of a service road from Changi South Avenue 1 and all necessary connection works, is scheduled for completion in September 2013; Phase B will be completed in June 2014. Mr Andrew Tan, BBR Group’s Chief Executive Officer was delighted to land this prestigious project. “We are proud to be involved in the building of Singapore’s fourth autonomous university which is said to be the first in the world to integrate the concept of design and innovation as a common thread in research and engineering. “The work is extensive and we believe that our credible track record, strong expertise and well-regarded competencies which have helped us to secure this project will be brought to bear as we execute it. As always, we remain committed to delivering a service quality and standards that is beyond reproach and that is the hallmark of our service,” he said.

The BBR Group, which started in 1993 as a specialist engineering group, has three core business activities, namely General Construction, Specialised Engineering and Property Development.

Update on projects

The Group is currently executing a number of civil engineering and building projects from both the public and private sectors, in Singapore as well as Malaysia. These include:

- two contracts totalling RM76.45 million to construct and complete the facilities works for the Kelana Jaya LRT Line Extension Project, Package A and B, in Kuala Lumpur, Malaysia, which are expected to be completed in end-2012 and July 2013 respectively;

- a S$48.3 million contract secured from Yang Kee Holdings Pte Ltd to construct Phase 2 of the Yang Kee Chemical Logistics Hub at Jurong Pier Road scheduled for completion end of 2012;

- a S$79.8 million contract secured from the Land Transport Authority to widen Keppel Viaduct targeted to be completed in the first half of 2015;

- a S$413.8 million construction contract awarded to a joint venture, Takenaka–Singapore Piling Joint Venture by the National Heritage Board to restore two iconic heritage monuments in the heart of the Civic District, the former Supreme Court and the adjacent City Hall targeted for completion in the second half of 2014. BBR’s wholly-owned subsidiary, Singapore Piling & Civil Engineering Private Limited has a 25 per cent share in the joint venture;

- a S$139.6 million contract from the Urban Redevelopment Authority to construct Phase 3B (MC02) of the Proposed Common Services Tunnel (CST) at Marina Bay targeted for completion in the second half of 2014;

- a Land Transport Authority contract worth S$81.5 million to design and construct the Tai Seng Facility Building for the Downtown Line Project with completion in November 2014; and

- a S$179 million contract from the Housing and Development Board to build 1,386 new homes in Pasir Ris Neighbourhood 5 due to be completed in second quarter 2014.

For its property development business, the Group is involved in three condominium projects.

- Lush on Holland Hill is a freehold development with 56 spacious units in two 12-storey blocks and is fully sold.

- Bliss@Kovan, another freehold site to be developed into a five-storey condominium with superior design elements consisting of 140 units, has sold a total of 98 units to date.

- It has also jointly developed with Shing Kwan (Pte) Ltd, 8 Nassim Hill, an upmarket development comprising 16 super luxury triplex units with basement car parks.

The Group posted a net profit after tax attributable to parent of S$3.5 million on the back of S$94.3 million revenue for its first quarter ended 31 March 2012. As at 8 May 2012 (RBM comment - not sure if this is a typo - do they mean 8 June 2012?), its order book stood at approximately S$555 million with projects lasting up to 2015. These comprise mainly civil engineering and building contracts predominantly in Singapore and Malaysia.

UNQUOTE

[pianist]

surged to 0.25 today..something brewing?

[RBM]

BBR disclosed the securing of a further material contract award earlier this evening. S$ 153 Million value. PLease see below. As ever, the challenge will be for BBR to execute the job well AND deliver a decent margin. BBR's share price has been generally trading in the S$ 0.210 - S$ 215 range in recent weeks - lets hope this announcement sees some share price upsides being realised.

++++++++++++++++++++++
BBR Holdings (S) Ltd (the “Company”) wishes to announce that Singapore Piling & Civil Engineering Private Limited, a wholly-owned subsidiary company, has been awarded a contract by Ascendas Land (Singapore) Pte. Ltd. to construct a mixed-use development at Fusionopolis Phase 5 at Fusionopolis Place. The contract sum is approximately S$153.1 million with a contract period of 24 months.

There is no material impact on the earnings per share or net tangible assets per share of the Company for the current financial year ending 31 December 2012.
++++++++++++++++++++++
Vested.

[ngcheeki]

http://info.sgx.com/webcoranncatth.nsf/V...E00361925/$file/BBR_2Q12PressRelease.pdf?openelement


Based on the Press Release of 2Q 2012 result announcement, there are 2 interesting information.

1. Order Book has increased from 1Q 2012 of S$555 million to Q2 2012 of S$773 million.

2. 56 Fully sold Lush on Holland Hill has recently obtained the Temporary Occupation Permit (T.O.P). Hence, 3Q result will be good due to recognition of 25% of the property sale. It'll definitely further reduce the net gearing of 39.5% level. Hopefully, the company will give a bigger dividend.