Straco Corporation

[Nick]

Free entry to venues among promotions rolled out by S'pore Tourism Board

http://www.todayonline.com/singapore/fre...promotions

Could boost visitor number this year ?

(Vested)

[Nick]

Singapore Flyer named top landmark in Singapore: TripAdvisor

http://news.asiaone.com/news/travel/sing...isor%C2%A0 [Article]

(Vested)

[Vseeker]

NB: Chance upon below on the "Creditors’ Voluntary Liquidation of Singapore Flyer Pte Ltd"
Probably NO impact to Straco
I'm Not vested in Straco and do not track its happenings...


NOTICE OF PREFERENTIAL DIVIDEND
=========================
Name of Company: Singapore Flyer Pte Ltd
(In Creditors’ Voluntary Liquidation)

Address of Registered Office: c/o Deloitte & Touche LLP
6 Shenton Way
OUE Downtown 2 #33-00
Singapore 068809

Company Registration Number: 200306169R

Amount per Centum: 100 Cents in a Dollar

Creditors Entitled: Preferential Creditors under Section 328 of the Companies Act (Cap. 50)

First and Final or Otherwise: First and Final Dividend
When Payable: 24 July 2015

Where Payable: c/o Deloitte & Touche LLP
6 Shenton Way
OUE Downtown 2 #29-00
Singapore 068809

Dated this 22nd day of July 2015
ANDREW GRIMMETT &
LIM LOO KHOON
Joint & Several Liquidators


NOTICE OF DIVIDEND
==============
Name of Company: Singapore Flyer Pte Ltd
(In Creditors’ Voluntary Liquidation)

Address of Registered Office: c/o Deloitte & Touche LLP
6 Shenton Way
OUE Downtown 2 #33-00
Singapore 068809

Company Registration Number: 200306169R

Amount per Centum: 65 Cents in a Dollar
First and Final or Otherwise: First and Interim Dividend
When Payable: 24 July 2015

Where Payable: c/o Deloitte & Touche LLP
6 Shenton Way
OUE Downtown 2 #29-00
Singapore 068809

Dated this 22nd day of July 2015
ANDREW GRIMMETT &
LIM LOO KHOON
Joint & Several Liquidators

[Nick]

Straco continues to power forward with organic growth from the core aquarium operations in China and the inclusion of the Singapore Flyer. Presently, there are 3 operating assets with each facing its own set of challenges and opportunities. Cash-flow continues to be strong since this is a capex light industry and I expect the Group to earn approximately $50 million this year. As always a number of risk (most explained in this thread) exist and investors should be mindful.

Singapore Flyer

For the first time, the result statement presents some figures on the Singapore Flyer profitability. It was reported that the Flyer generated revenue of $17.78 million in 1H 2015 and has an operating cost of $5.88 million in 2Q 15. Assuming constant quarterly cost, the Flyer generates EBIT of $6.00 million. This implies EBIT margin of 33.7%.

1H 2015
Revenue: $17.78 million
EBIT: $6.00 million (assuming 1Q cost = 2Q cost)
Interest Expense: $0.89 million
NPAT: $4.25 million (17% tax)

The annualized NPAT would be approximately $8.5 million with EBITDA of $19.8 million. Considering the total acquisition cost of the Flyer was $140 million, this deal implies a 6% return on investment and EV/EBITDA of 7. Initially, when Straco purchased the Flyer, the consensus was that it will take money and time to rejuvenate this loss making asset and that it will drag down Straco results. Ironically, the Flyer turned out to be profitable without any major rejuvenation projects being undertaken yet. Sometimes, simple cost optimization and experienced tourism asset management goes a long way.

SOA

Increase in visitor numbers, revenue and profits. The key catalyst (or risk) is the opening of the Shanghai Disneyland in the months to come. There are plans to increase the ticket prices substantially towards the end of the year as earlier stated in this thread. Remains a very important profit contributor.

UWX

The curb in visitor numbers to the island has hurt its performance. Increase in ticket prices at the end of the year may stem the decline in operating numbers.

(Vested)

[Nick]

http://infopub.sgx.com/FileOpen/Date%20o...eID=374662

Results will be released on 13 Nov 2015. Haze would have impacted the Flyer revenue IMO though the aquariums could benefit from the strengthening RMB.

(Vested)

[hailstorm87]

Another set of good results. 

http://infopub.sgx.com/FileOpen/Straco3Q...eID=378333

<vested>

[Nick]

Recently took some time to take a look at their 3Q results and here are my thoughts:

1) The Flyer continues to be profitable generating revenue of $28.8 million in 9M 15. Based on the annualized 1Q Flyer expenses, I estimate the Flyer 9M 15 PBT to be approx $10 million. A far cry from the fear of it being loss-making when the acquisition was initially announced. This is remarkable considering the Management has only tweaked the operation of the Flyer without incurring any major capex or rejuvenation projects.

2) The FCF generating ability of the Flyer has boosted the Group's cash-flow substantially. Despite making the substantial M&A last year, the Group maintains net cash of over $60 million. This can easily finance any capex to rejuvenate the Flyer or pay a higher dividend in FY 2015.

3) Not everything is rosy. UWX was affected by the cuts in visitor number to the island it is located it hampering its results. Excluding Flyer contribution, the growth in revenue was only 2.8%. The positive growth in SOA was offset by the fall in revenue in UWX.

4) Overall outlook continues to be positive. But there are near term challenges - slowdown in China and Singapore economy - that might hamper its stellar growth prospects.

(Vested)

[Nick]

http://www.straitstimes.com/lifestyle/en...y-shanghai

An interesting article about the exciting developments ahead in Shanghai tourism industry. IIRC, there have been a fair bit of debate in this thread about its implications on Straco.

(Vested)

[d.o.g.]

Recently took some time to take a look at their 3Q results and here are my thoughts:

1) The Flyer continues to be profitable generating revenue of $28.8 million in 9M 15. Based on the annualized 1Q Flyer expenses, I estimate the Flyer 9M 15 PBT to be approx $10 million. A far cry from the fear of it being loss-making when the acquisition was initially announced. This is remarkable considering the Management has only tweaked the operation of the Flyer without incurring any major capex or rejuvenation projects.

(Vested)

Actually, the results of the Flyer are not remarkable at all. The Flyer was unprofitable previously because it had (1) a large and expensive debt load; and (2) a poor ticketing agent. When Straco bought the Flyer, (1) it borrowed a much smaller amount at a much lower cost so the debt savings were considerable and (2) it changed the ticketing agent so the effective discount dropped, materially improving revenue.

These 2 actions essentially made the Flyer profitable immediately. Not rocket science, and obviously foreseeable to anybody who bothered to do their own homework, instead of blindly believing what the brokers were writing.

As usual, YMMV.

[lester]

Straco Q2 results are out (http://straco.listedcompany.com/newsroom...LY3L.2.pdf):

SINGAPORE, 14 August 2017:- Mainboard-listed Straco Corporation (“Straco” or “the Group”), a developer and operator of tourism-related attractions, reported a 8.4% increase in Group revenue to $30.21 million for the second quarter ended 30 June 2017 compared to 2Q2016, mainly attributable to higher revenues contributed by the Shanghai Ocean Aquarium (“SOA”), Lixing Cable Car (“LCC”) and Singapore Flyer, as visitor numbers to these three attractions increased. Lower revenue was reported at Underwater World Xiamen (“UWX”) for 2Q2017 as visitor numbers fell below the corresponding period. Group profit was $11.41 million for the quarter, 23.4% higher than that of 2Q2016. For the quarter under review, overall visitor numbers to all the attractions increased 8.3% over 2Q2016 to 1.23 million visitors. Cumulatively, Group revenue for 1H2017 increased 6.4% over last year corresponding period, as revenues at SOA, LCC, and the Singapore Flyer increased. Group profit for 1H2017 increased 15.6% compared to 1H2016 as the three attractions reported higher profits. Commenting on the results, Straco’s Executive Chairman, Mr Wu Hsioh Kwang said: “We are pleased with the overall performance for the first half of the year as our attractions, except UWX, registered positive growth. UWX’s performance had been impacted by unfavourable weather with more rainy days in May and June, as well as newly 2 implemented capacity restriction to Gulangyu by the local authorities, resulting in decline in visitor numbers in 2Q2017.”  

Seems like they did pretty well for Q2/ H1, but UWX underperformed due to bad weather. Hopefully with the recent Unesco status, UWX can outperform in H2.

Lester (Vested)