Kingsmen Creatives

[CY09]

Taking a qualitative analysis, Kingsmen Exhibiton & museum segment may not grow much this year. This is due to one off projects such as the new museum at city hall, Sea Games as well as SG 50 exhibitions.

As for affordable luxury, fast fashion; i think we should be ready to see a fall as China side of business is slowing and I think Singapore may be starting to slow as retail business find it increasingly hard. It has been relfected in Kingsmen latest results. It just shows the cyclicalness of business.

[corydorus]

Considering the market conditions hitting Singapore and China, mute result is a surprisingly good result imo. Imagine what it can deliver when both markets recover. I would expect lesser profits but instead of 7.5% gain. Digging in the report we will find mainly due to as following

"Gain on deemed disposal of interest in an associate 572 -
Gain on disposal of interest in an associate 2,017 -
Gain on fair value adjustment of available-for-sale financial asset 3,930 -"

Without that. KMC will records smaller profit but still good enough. What i do not understand is why they did not breakdown the Q4 result. Is that normal accounting practises ?

Cory

[piggo]

Attachment 1

KINGSMEN CELEBRATES 40 YEARS, INITIATES MANAGEMENT RENEWAL

[CY09]

http://infopub.sgx.com/FileOpen/Kingsmen...eID=404515

Kingsmen results was a surprise. While revenue has increased, my suspicion is that Kingsmen had to accept lower margins for its project tenders especially for those mid tier retail stores. Again, it shows the cyclicalness of the business. Fortunately for equity holders, the loss is less than 1 mil.

On the bright side employee benefit expense rose slower than revenue growth, which means Kingsmen may be making their employees work harder for the buck.

Time to see how Kingsmen will respond to lower margin projects. The thing which also worries me is how ops cash flow before WC changes is cash flow negative, hope this is due more to its joint venture business

<formerly vested for 3 months>

[ksir]

http://infopub.sgx.com/FileOpen/Kingsmen...eID=404515

Kingsmen results was a surprise. While revenue has increased, my suspicion is that Kingsmen had to accept lower margins for its project tenders especially for those mid tier retail stores. Again, it shows the cyclicalness of the business. Fortunately for equity holders, the loss is less than 1 mil.

On the bright side employee benefit expense rose slower than revenue growth, which means Kingsmen may be making their employees work harder for the buck.

Time to see how Kingsmen will respond to lower margin projects. The thing which also worries me is how ops cash flow before WC changes is cash flow negative, hope this is due more to its joint venture business

<formerly vested for 3 months>

I was surprised by the increased in Interior unit revenue and sadly the loss that Kingsmen suffers. The margin of Interior projects must be darn low for the quarter.

To look ahead, i look backward to gauge the backlog order.

As per 30-Apr-2015:
Total orders secured: $204M
Recognizable in FY2015: $181M
2015Q1 Revenue: $52M
Backlog FY2015: 181-52 = $129M

As per 30-Apr-2016:
Total orders secured: $174M
Recognizable in FY2016: $154M
2016Q1 Revenue: $61M
Backlog FY2016: 154-61 = $93M

So if you compare the order backlog itself is down from $129M to $93M.
But hey, how about if the lower margin persists?

I think quite highly of the 2 Founders, but in this case, the picture forward may not be as bright as the result document is trying to paint.

I hope the lower margin doesn't persist, otherwise, it will get uglier.

<divested last year, hence probably negatively biased>

[Ray168]

Results were just released.

http://infopub.sgx.com/FileOpen/Kingsmen...eID=391098

Thought its a somewhat muted year for Kingsmen though they are holding up well, with their expertise/experience and diversification in different segments.

- Net profit increase mainly because of the disposal of kingsmen cmti
- Gross profit margin remain at 25~%
- Slow demand in the high-end luxury retail segment continues and is affecting kingsmen's business.
- D/E has remained more or less the same although in absolute terms, it has doubled from 6.5m to 13m.

Wonder how profitable the affordable luxury, fast fashion and food & beverage segments are? Reckon margins will not be as good as the high-end luxury retail segment.

Pico seems to be doing better, with their focus on mainly on Exhibition and Event Marketing Services.

http://www.pico.com/en/news/pico-far-eas...al-results

If we take off the one time gain on asset disposal and asset appreciation ($2.017M & $3.93M)... see note 7 of FY15 annual report

then the net profit is only $14.86M or EPS 7.01c

Compare with FY14 EPS 8.84c, the company profit was down 20.7% instead of gain 9.8%



(not vested)

[setan]

Hi All,

Can help me to understand why the NPAT is -2.021 mil but they based on Profit attributable to shareholders of -0.882 mil to calculate the EPS?

May I know what is the difference?

Sorry for the newie question?

Thanks.

setan

[Jacmar]

Hi All,

Can help me to understand why the NPAT is -2.021 mil but they based on Profit attributable to shareholders of -0.882 mil to calculate the EPS?

May I know what is the difference?

Sorry for the newie question?

Thanks.

setan

Well it is only logical isn't it? If you own 50% of the company, then u are entitled to 50% of the profit or loss. Hence the calculation of EPS for the equity shareholders.  The tricky part will be the cash flow statement. I think it is not adjusted for this unlike the P&L statement. Accountants pls correct me if I am wrong here.

[weijian]

Hi All,

Can help me to understand why the NPAT is -2.021 mil but they based on Profit attributable to shareholders of -0.882 mil to calculate the EPS?

May I know what is the difference?

Sorry for the newie question?

Thanks.

setan

Well it is only logical isn't it? If you own 50% of the company, then u are entitled to 50% of the profit or loss. Hence the calculation of EPS for the equity shareholders.  The tricky part will be the cash flow statement. I think it is not adjusted for this unlike the P&L statement. Accountants pls correct me if I am wrong here.

I am not an accountant, but based on my FS studying so far - it isn't consolidated. Since only subsidiaries are consolidated which means the Group owns >=50%, there is effective control of the company and its balance sheet (which includes the cash).

[bliss88]

Hi All,

Can help me to understand why the NPAT is -2.021 mil but they based on Profit attributable to shareholders of -0.882 mil to calculate the EPS?

May I know what is the difference?

Sorry for the newie question?

Thanks.

setan

The difference is due to profits or loss due to minority interests (MI).  For instance, if parent company owns only 60% of a subsidiary, the subsi 100% results will be consolidated but there is a 40% MI (shareholders of subsi). 

Therefore, the net earnings attributable to shareholders (refer to shareholders of the parent co) will not include any earnings or loss that "belongs" to the 40% shareholders of the subsi.