Kingsmen Creatives

[Musicwhiz]

Business Times - 30 Dec 2010

Kingsmen undergoes management changes

KINGSMEN Creatives Ltd said yesterday it has put in place several management changes to better position the group for growth in the coming years.

As part of the changes, Simon Ong, one of the founders of the group and the group managing director will also be appointed as CEO.

He will oversee the group's day-to-day management, its strategic development, as well as the creative direction and standards of the group.

Benedict Soh, executive chairman and also a founder, will transition out of his day-to-day role in the group and focus on its strategic direction, explore business opportunities, and build the group's leadership capabilities.

He will also continue to oversee some of the group's overseas offices.

Meanwhile, Anthony Chong, executive director of Kingsmen Exhibits Pte Ltd since 1999, will be promoted to managing director of Kingsmen Exhibits and remain as a board director.

In his new position, Mr Chong will be responsible for identifying new opportunities and business to drive the group's exhibitions, museums, and thematic business, as well as the day-to-day operations and management of Kingsmen Exhibits.

As well, Alex Wee, executive director of Kingsmen Projects Pte Ltd since 2000, will be promoted to managing director of the unit and will be responsible for developing and growing the group's retail and corporate interior business.

The above changes will take effect on Jan 1, 2011, the company said.

[dydx]

I think the key change is that Ben Soh will let go his day-to-day supervisory role to focus on leading Kingsmen's strategic direction, explore business opportunities (especially overseas), and on building the group's leadership capabilities.

Simon Ong will have a sharper focus on his day-to-day supervisory role of the group operations, and keep his long-standing role in the creative direction and standards of the group.

Apart from that, the other proven key leaders in Kingsmen will continue with what they can do best, plus more direct personal responsibilities on what they have been tasked to do.

[dydx]

This afternoon (1Jan11), I checked out the new Knightbridge along Orchard Rd. I saw both the new duplex stores for Brooks Brothers.....
http://www.brooksbrothers.com/men.process
and Malmaison by The Hour Glass, are currently being fitted out. Guess what, both stores are being built by none other than KINGSMEN!

Kingsmen's market position as the preferred fit-out contractor for top-end fashion goods retail stores is quite clearly - very strong!

[valuestalker]

Just to share the following:
Kingsmen won 2 interior fit-out in company i am working now.
2 out 3 interior fit-out works awarded to Kingsmen, another 1 to Pico.
From feedback that i gathered, they are disappointed in Pico service as they keep delaying the dateline.
As for Kingsmen, the response is that they are happy with Kingsmen's prompt response and flexibility to the change of requests.

[Musicwhiz]

Just to share the following:
Kingsmen won 2 interior fit-out in company i am working now.
2 out 3 interior fit-out works awarded to Kingsmen, another 1 to Pico.
From feedback that i gathered, they are disappointed in Pico service as they keep delaying the dateline.
As for Kingsmen, the response is that they are happy with Kingsmen's prompt response and flexibility to the change of requests.

Thanks for the info, kind of you to share.

[Nick]

Just to share the following:
Kingsmen won 2 interior fit-out in company i am working now.
2 out 3 interior fit-out works awarded to Kingsmen, another 1 to Pico.
From feedback that i gathered, they are disappointed in Pico service as they keep delaying the dateline.
As for Kingsmen, the response is that they are happy with Kingsmen's prompt response and flexibility to the change of requests.

Thanks for sharing your working knowledge with us.

A good example of why Peter Lynch advocates investing in what we know and understand since only then can we have an edge over the rest of the market. Such knowledge can never be found in any annual report or SGX announcement but only through one's own experience.

(Not Vested)

[D123]

I realized that Kingsmen employs significant leverage of their balance sheet through trade payables, bringing their liabilities to 150% (on average) of book equity. Is this a concern? Pico has usually kept it around 100% and Cityneon only breached the 100% mark last year when there was a surge in orders.

In addition, in the 2009 annual report, Kingsmen revealed significant trade receivables that are past due but not impaired, yet more than 50% of these past due receivables have been past due for >90days. E.g. in 2009, $6.3mn receivables were past due, with $3mn past due for >90 days. Yet allowance for bad debt was only 1.6 mn. Is the company under providing for receivable impairment?

Does anyone know how the industry works with respect to trade terms?

I guess in general, I'm also trying to figure out how and if companies can hide bad debts and cash flow problems from their financial statements...

[dydx]

I am aware that most of Kingsmen's trade payables are to their 'in-house' or dedicated sub-contractors, many of them are housed (as paying tenants) in Kingsmen's buildings. So I suppose Kingsmen would treat them like close working partners - i.e. when Kingsmen collects payments from a customer based on work completed (usually in stages) on a project, the related sub-contractors will be paid quite promptly according to their shares of the work completed.

I suppose ultimately the quality or collectibility of Kingsmen's trade receivables will depend on the quality of their customers and their credit standing, assuming Kinsgmen has delivered its services and met other contractual terms and customers' expectations. We know Kinsgmen has a quality customer base, including Tiffany, RWS, The Hour Glass, and the likes.

I suppose in most projects Kingsmen would have a front-end payment amounting to a fair percentage of the total contract sum, with the remaining amount to be settled in accordance with stages of the project.

To hide bad debts, a listed company will have to pass the tests of its external auditors (in Kingsmen's case: E&Y) and Audit Committee members (in Kingsmen's case: including Lee Hock Lye (ex-banker) and Wong Ah Long (ex-CEO of Suntec)).

[freedom]

from what I have read from all the financial statements, Kingsmen have moved up into a bigger league now. their annual revenue rose from slight more than 100 million in 2006 to 190 million in 2008 to around 250 million or more now. their ability to manage larger project is supported by their success in USS. It is no surprise that their gross profit margin dropped initially. I believe it will grow much stronger in the future. I think when Kingsmen grows even stronger, its gross profit margin probably will drop even more.

[freedom]

I wonder why Mr. Market discounts Kingsmen Creative so much? with projected 7 - 8 cents eps for FY2010 and around 15 cents cash, price of 0.57 mean PE of 7 - 8 or PE of 5 - 6 excluding cash.

1. Kingsmen has solid management
2. Kingsmen has continous revenue grwoth and earning growth and consistent high ROE of above 20%
3. Kingsmen is net cash(28 + million cash with around 5 million debt), clean balance sheet and solid cash flow.
4. Kingsmen is paying around 50% of their profit as dividend, currently yielding more than 6%.

or is there something we don't know about Kingsmen?