LHT Holdings

[brattzz]

Revenue down, but dividends maintain at 5cts!
Sale and leaseback of factory.

NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of LHT
Holdings Limited (“the Company”) will be closed on 18 May 2018 for the preparation of dividend
warrants for the first and final one-tier tax exempt dividend of 5.0 cents per ordinary share (“the
Dividend”) for the financial year ended 31 December 2017.

Duly completed registrable transfers received by the Company's Share Registrar, B.A.C.S. Private
Limited, at 8 Robinson Road #03-00, ASO Building, Singapore 048544 up to 5.00 p.m. on 17 May
2018 will be registered to determine members' entitlements to the said dividend.

Members whose Securities Accounts with The Central Depository (Pte) Ltd are credited with shares
at 5.00 p.m. on 17 May 2018 will be entitled to the proposed dividend.

The proposed dividend, if approved by the members at the Annual General Meeting to be held on 27
April 2018, will be paid on 25 May 2018.

[BlueKelah]

It seems lht may have stiff competition from other companies operating in the pallet sector. 2017 was a stellar year for manufacturing and economy did very well hence there should have been a rise in demand from increasing warehouse activity. However, LHT's revenue did not reflect that and went down instead.

Is there some fundamental change in the pallet industry? E. G.. Going towards plastic pallets?

[dydx]

FY17 AR makes interesting reading..
http://infopub.sgx.com/FileOpen/LHT%20AR...eID=497814

After selling the unexpired lease of industrial property at 44 Sungei Kadut St back to JTC for a total $14.48m - including a gain of $5.6m! - together with a lease-back on the property till 31Dec2020 at a month rent of $54.5k, LHT's latest 31Dec17 B/S showed a bloated net cash reserve in excess of $28.3m, or the equivalent of $0.523/share. The lease-back will allow LHT to continue enjoying a net rental income from the property for another 3 years.

A generous $0.05/share final dividend is pending.

[brattzz]

1) REVIEW OF PERFORMANCE
For the Financial Year 2017, the Group registered revenue of 40.61 million,
a 16.7% decrease from $48.78 million in FY2016. Revenue from pallet and
packaging products decreased by 23.4% to $30.39 million (FY2016: $39.67
million), mainly due to reduced demand for pallets in the year ---> Increase competition, loss of 9.3milo

2) Revenue from pallet rental services decreased by
11.7% to $4.54 million (FY2016: $5.14 million) due to weaker demand in the
logistics market. ---> Lost of market share > 1 milo

[RBM]

LHT reported out its FY 2018 financials earlier this evening. On the plus side, revenues are up by ~ 5% and Admin Costs were down by ~ 6%. Normally that would be good news but LHT’s Board has made a hugely disappointing decision vis-a-vis dividend level, i.e. to cut it from 5 cents per share to only 3 cents per share. This despite having ample cash (~ S$ 18 Mln in the bank at end Year and only ~ S$ 0.5 Mln of debt). And LHT easily has the retained earnings to maintain the 5 cents dividend level (or even raise it) that had been paid out over the last couple of years. I’m hoping this is in no way related to LHT developing a new Singapore HQ/Warehouse - in the statement of cash flows there is an ‘intriguing’ (and minimally explained) line entitled Placement of Fixed Deposits, with S$ 11 Mln ascribed to it.

To CEO Ms. Yap: for the sake of saving ~ S$ 1.0 Mln (yes: S$ 1.0 Mln) dividend cash-out, you and your LHT Board Colleagues have in one stroke removed the aura, i.e. the coveted aura, of dividend stability from the Company. When the Company is essentially debt free and there is SGD 18 Mln in the bank, I have to respectfully challenge i) the quality of your decision making, and ii) your focus on Investor Relations.

Vested and disappointed, RBM

[karlmarx]

LHT's earning ability remained stable and did not materially improve over the past 10 years.

What made LHT well-received by shareholders is that it has been increasing the payout ratio from low teens from FY07 to a third or more in recent years. Although LHT could afford to maintain the same payout as FY17, the FY18 dividend is still about 50% of profit.

What is management planning to do with the huge cash reserves accumulated over the years?

There is the possibility that LHT could be saving up for substantial capital expenditure. After all, its PPE has been shrinking (albeit not aggressively) for the past 10 years. And it has yet to move its operations to a new location.

[brattzz]

AGM is end of this month, anyone attending?

Some thoughts,
1) Write off - 3 milos in tian jin eco office - seek explaination on this?
2) Fixed Deposit 11 milos in bank really?? - Saving up for new Capax? new factory needed!!
3) Reducing revenue, profit margins and market share - what's the problem/plan to improve?/short term 3-5 years what can we see?

[RBM]

AGM is end of this month, anyone attending?

Some thoughts,
1) Write off - 3 milos in tian jin eco office - seek explaination on this?
2) Fixed Deposit 11 milos in bank really?? - Saving up for new Capax? new factory needed!!
3) Reducing revenue, profit margins and market share - what's the problem/plan to improve?/short term 3-5 years what can we see?

Hello brattzz,

Doubt I will be able to make LHT’s AGM, regrettably.

I have had a good read of the AR and, as a result, I very much agree with your first two questions. The AR did not contain any explanation of the material Tianjin hit and the SGD 11 Mln ‘Deposit’ surely merits more narrative (> 30% of LHT’s market-cap!!). There is no easy way of saying this .... but this kind of thing raises suspicions.

I am also very disappointed with this years’ dividend. When the Company has SGD 18 Min (incl. SGD 11 Mln on ‘Deposit’) on a/c, why would they cut SGD 1 Mln off their dividend payment? Poor decision-making by the Board to which Mr. Market expressed his displeasure in the days following LHT’s FY 2018 Financials disclosure. If I was at the AGM, I would challenge Ms. Yap on why she and her Board so readily relinquished Dividend Stability. Thinking aloud - could the dividend have been maintained at 5 cents, as per the last two years, if the deposit had been set at SGD 10 Mln?

On my proxy form, I will be voting against reelection of NED Dr. Wu - the good Dr. has held a very consistent shareholding throughout his long-standing tenure as a Director, i.e. zero shares. 

Best to you, RBM

[brattzz]

Ok, thanks RBM, I will try to attend and ask questions, let see what we can get...👍

[nitro]

Ok, thanks RBM, I will try to attend and ask questions, let see what we can get...👍

Hi Brattzz,

Did you attend the agm? if yes, mind sharing?

Tq