Kingsmen Creatives

[shn]

So far so good! Steady growth with reasonably good dividend yield. I believe market will re-rate it soon; in particular, if it increases the final dividend pay-out to 3 cents (from 2.5 cents) with the strong cash flow and cash in hand.

Quick Summary of Q2FY12 Results
•Q2FY12 revenue increased by 25% to $70.9M while H1FY12 revenue increased by 26.9% to $117.8M. It is noted that Q2 revenue is about 1.51 times that of Q1.

•Q2FY12 gross profit increased by 18.6% to $19.5M while H1FY12 revenue increased by 19.6% to $32.3M. It is noted that Q2 gross profit is about 1.54 times that of Q1. Gross margin is 38.0% for Q2FY13 and 37.8% for H1FY12.

•Net profit for Q2FY12 increased by 11.8% to $5.23M while for h1FY12 increased by 20.4% to $7.22M. Q2FY12 net profit is 2.63 times that of Q1FY12 net profit. Net margin for Q2FY12 is 8.0% while that of H1FY12 is 6.5%. Net margin for Q1FY12 is 4.4%.

•Cash has increased 48.3% from $33.2M to $49.3M.

•Debt is low and has reduced from $5.2M to $4.4M.

•Cash flow from operation for Q2FY12 is $12.5M while that for H1FY12 is $24.8M though profits before tax are only $6.5M and $8.8M respectively.

•Net cash used in investment activities are low, only $289K for Q1FY12 and $764K for H1FY12.

•Earnings per share is 3.79 cents for H1FY12. Assume the same EPS for H2FY12, the PER is 9.2 at the last closing price of 0.695.

•Net asset value per share is 36.06 cents.

•Revenue for Exhibitions and Museum Division increased by 54.8% in H1FY12. It will continue to do well this year.

•Interior Division continues to see strong potential for growth.

•As of 10 August 12, Kingsmen has been awarded contracts of about $238M for completion in FY12. Revenue for H1FY12 revenue is $117.8M.

•Interim dividend remains at 1.5 cents. This is going to cost Kingsmen $2.87M. Assuming a final dividend of 2.5 cents as in last FY, total dividend payout will be $7.7M. If final dividend is 3.0 cents, total dividend payout will be $8.6M (consider that it has $49.3M in cash).

[dydx]

•Earnings per share is 3.79 cents for H1FY12. Assume the same EPS for H2FY12, the PER is 9.2 at the last closing price of 0.695.

A full-year EPS estimate of $0.0758 (i.e. 2x of $0.0379) for this FY12 is most undoubtedly way too low, as last year FY11's EPS at $0.0856 was already higher than that!.....
http://info.sgx.com/webcoranncatth.nsf/V...10031857B/$file/KingsmenSGXAnnouncementQ411.pdf?openelement

We have to bear in mind that in a good year, Kingsmen's 2H earnings can be as much as 1.5x of its 1H earnings - this just happened in last FY11, where the operating profit after tax for 2H was 1.79x of that for 1H. So it is conceivable - and entirely possible - that Kingsmen's full-year EPS for FY12 could well hit $0.095. Based on the last done share price of $0.695, Mr Market is now pegging a PER of only approx. 7.3x on this steady business which pays out great, twice-a-year dividends, as it does not need much permenant capital to operate and grow further.

[freedom]

since Kingsmen's earning observes significant seasonality, trailing twelve months earning could be a reasonable estimate.

[dydx]

This morning (13Aug12), Mr Market has so far marked up Kingsmen by another $0.02, to $0.715 - a new high!

I guess more investors have started to recognize that through focus, effort, and building on its human resources and delivery capabilities in the last few years, Kingsmen's senior management headed by Ben Soh and Simon Ong has not only increased the company's earnings. More importantly, they have also enlarged and diversified Kingsmen's earnings base, which means that the company is now much better placed to sustain steady business and earnings growth, backed by a biggger/growing prime-named customer base, a bigger/comprehensive range of products/services, and a wider geographical markets coverage. This important point has been clearly described by Ben Soh, Executive Chairman, in his own words, in p1 last para of Kingsmen's latest press release.....
http://info.sgx.com/webcoranncatth.nsf/V...6002F21C6/$file/Kingsmen1HFY12NRFINAL.pdf?openelement

[piggo]

Wouldn't put too much thought into the increase in share price.... It's usually due to the declaration of dividends, and should fall back to it's original price point after xd

[Musicwhiz]

I guess more investors have started to recognize that through focus, effort, and building on its human resources and delivery capabilities in the last few years, Kingsmen's senior management headed by Ben Soh and Simon Ong has not only increased the company's earnings. More importantly, they have also enlarged and diversified Kingsmen's earnings base, which means that the company is now much better placed to sustain steady business and earnings growth, backed by a biggger/growing prime-named customer base, a bigger/comprehensive range of products/services, and a wider geographical markets coverage. This important point has been clearly described by Ben Soh, Executive Chairman, in his own words, in p1 last para of Kingsmen's latest press release.....
http://info.sgx.com/webcoranncatth.nsf/V...6002F21C6/$file/Kingsmen1HFY12NRFINAL.pdf?openelement

I guess for a Company like Kingsmen which is service-oriented and whose value consists mainly of employee skills which cannot be capitalized on the Balance Sheet, it would be difficult for Mr. Market to assign a specific value or premium to that. Most of Kingsmen's capabilities comes from its excellent teams and organization abilities, along with a focus on quality in all that they do.

While Ben Soh's statement was inspiring, as a shareholder I am rather wary of execution, and I am hoping that this does not turn out to be a NATO (No Action, Talk Only) situation. Even if action was put in place, there's also no guarantee that the expected results would be achieved as the marketplace is dynamic and extremely competitive.

What Kingsmen can do (and has done, I believe) is to constantly engage with current clients and send their marketing/sales team to prospect for new clients; especially those with good roll-out Management potential. This is for the Interiors Division. For M&E, it would be difficult to build up a "baseline" for revenues as these events are understandably lumpy, and not all of them take place annually (some are semi-annually); while others like the Formula One are contingent upon Government decisions.

Conservatively, I would need to see at least two years' worth of elevated numbers (top-line, bottom line) in order to be somewhat convinced of the Company's ability to elevate itself to a new baseline level of performance. While Ben Soh and Simon Ong are investing in their offices throughout SEA, they should also continue to sharpen their focus on Singapore itself and to push for growth in all four divisions (R&D and IMC surprised me, no doubt).

Just my thoughts.

piggo, the share price rise was probably due to the cum-dividend; but I certainly hope it falls back to a decent level so that I can accumulate more!

[dydx]

Wouldn't put too much thought into the increase in share price.... It's usually due to the declaration of dividends, and should fall back to it's original price point after xd

I doubt very much in this case investors are buying up Kingsmen purely because of the just declared $0.015/share Interim dividend - which is payable on 24Sep12, with the 'XD' date likely on 4Sep12 - as it amounts to only approx. 2.1% of the current share price at $0.71. Besides, Kingsmen has been paying out an unchanged interim dividend of $0.015/share for quite a few years now, so most shareholders and investors do expect the same this time. Perhaps investors are buying also motivated by the possibility of a higher Final dividend (last FY11: $0.025/share) to come, bearing in mind Kingsmen will likely post higher overall profits in this FY12.

But it is indeed true that Kingsmen's recurrent earnings base has been quite substantially enlarged over the past few years, and many investors have recognized this fact, and more will do so. Hopefully, this will further boost Kingsmen's share price towards its justified fair value, which will likely be realised in a trade sale, if and when the 2 controlling shareholders decide to retire eventually and sell their combined majority stakes to a right suitor.

[Musicwhiz]

*For the full article, please visit the website.

Singapore continues to be the top draw for MICE activities! This will benefit Kingsmen's business over the long-term.

The Straits Times
www.straitstimes.com
Published on Aug 14, 2012
S'pore is top venue for meetings
It leads UIA ranking's host country category for 1st time

By Lim Yi Han

SINGAPORE is the top international venue for meetings, according to the latest global rankings by the Union of International Associations (UIA).

It is placed above other developed Meetings, Incentives, Conferences and Exhibitions (Mice) countries such as the United States and Japan, which ranked second and third respectively.

It is the first time Singapore has topped the host country category, with 919 meetings and conferences which met the UIA criteria. This is a 27 per cent rise since 2010, when Singapore was in third place, with 725 meetings.

Singapore also maintained its position as the "Top International Meeting City" last year, for the fifth consecutive year.

The rankings were released in June.

The meetings taken into consideration by UIA include those organised and/or sponsored by international organisations which appear in the Yearbook of International Organisations and in the International Congress Calendar.

Some national meetings with international participation organised by national branches of global organisations are also taken into account.

Meetings held here last year include the International Air Transport Association's (IATA) World Passenger Symposium, the World Chinese Entrepreneurs Convention and the World Orchid Conference.

Ms Jeannie Lim, executive director of conventions, meetings, exhibitions and conferences at the Singapore Tourism Board (STB) said the rankings are a result of "the commitment and hard work of our local associations and other partners in the Mice industry".

Ms Lim said: "Behind many successful congresses and meetings are proactive local associations who collaborate with partners to secure the event in Singapore."

She added: "These local associations form a solid support base for Singapore's conventions and meetings industry."
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[dydx]

A higher than usual 583 lots were transacted between $0.705 and $0.715 yesterday (13Aug12, Monday) - after Kingsmen released a set of positive 2Q/1H results and declared the usual $0.015/share Interim dividend last Friday (10Aug12) evening - and the counter has quite convincingly crossed the psychologically important (to some people!) $0.70 big-figure mark and closed at $0.71. And this morning (14Aug12, Tuesday), only 10 lots were transacted so far at $0.71, and the counter seems to have reverted back to the usual illiquid pattern.

A relevant question: Who bought up most of the shares transacted yesterday? (Note: Let me declare here that I was not in the market most of yesterday, and I have not bought or sold a single Kingsmen share since Mar11.)

I find it difficult to understand that many minority shareholders actually turned sellers yesterday when Kinsgmen's share price breached the $0.70 mark, and they did so just after the company has posted a set of good financial results including very encouraging growth in business volume and profits, and knowing a $0.015/share Interim dividend is coming on 24Sep12. This appears to be another case of those who believe in and acted on "selling on news", going wrong!

For those who bought into Kingsmen yesterday say at $0.71, and assuming the company would just pay out an unchanged Final dividend of $0.025/share next May13, they can expect to enjoy an effective dividend yield of approx 5.7%p.a., bearing in mind they will be receiving the $0.015/share Interim dividend within just 40 days. They will stand to gain from a likely further rise in Kingsmen's share price over time, driven possibly by an upward re-rating by Mr Market or positive corporate actions.

[Salty]

Kingsmen is so cheap if you strip out the cash.
The concern is that the business is non-recurring in strict sense.

Overall i think it is greatly run and a cash cow to it.

Thanks for sharing this wonderful business.