Kingsmen Creatives

[freedom]

cityneon last night posted a better gross profit margin than 2009.

can Kingsmen Creative do the same?

[valuestalker]

From CityNeon result announcement:

It’s noteworthy that the Group has also just been awarded a significant
project (valued at $13.5 million) by Resorts World Sentosa to design and theme an attraction as part of the Resort’s second
phase development in FY2011

No news from Kingsmen pertaining to RWS phase 2? Hopefully the arbitration on RWS project won't affect their bid on future RWS projects.

[hongonn]

Actually i was wondering, if this counter has the competitive advantage or economic moat, how come the gross and net profit margin don't seem to be very high. And in fact they are slightly lower than its competitor such as Cityneon.

If they are so good what's wrong to ask 10% or 20% than its competitors. Will the customers just turn away if they trying to ask for a little bit of premium? Or the low margin is caused by other reason?

[Nick]

Actually i was wondering, if this counter has the competitive advantage or economic moat, how come the gross and net profit margin don't seem to be very high. And in fact they are slightly lower than its competitor such as Cityneon.

If they are so good what's wrong to ask 10% or 20% than its competitors. Will the customers just turn away if they trying to ask for a little bit of premium? Or the low margin is caused by other reason?

Margins and moats are not proportionate.

Some of the companies with the highest moats - Noble, Wilmar, SIA etc - have pretty low margins due to the nature of their own business. Noble net margin is merely 1-2% but it is nearly impossible for any company to replicate its business unless it has a few billion dollars in the bank and a few years to spare. The trading business is easy to replicate, the asset medium strategy is not. Conversely, companies with pretty high margins may have very low moats - REITs and business trust comes to mind. Margins are over 30% but anyone can buy a property and lease it out. Ultimately, they are not mutually exclusive either - there are high margin, high moats companies also - ARA, Keppel, Semb Corp, infrastructure companies etc. At the same time, there are low margin low moats companies as well.

Personally, I prefer to look at asset return rather than margins. Margin trend is more important to me. This is my own views - feel free to disagree.

---

Kingsmen declares 2.5 SG cent FY dividend

[freedom]

better Q4 margin, GPM 36+%, NPM 10+%. but the revenue dropped quite a lot in Q4, even lower than Q3.

was it due to USS project only?

---

the outlook also much better with so many more thematic projects coming. plus, a few already awarded. Universal Studio Singapore Phase 2, Gardens by the Bay and the Hong Kong Disneyland Extension.

the question will be how many more of these thematic projects Kingsmen Creative will take and whether they have enough resources for as many thematic projects as possible.

[dydx]

I thought the just released Kingsmen's FY10 (ended 31Dec10) full-year results announcement makes interesting reading.....
http://info.sgx.com/webcoranncatth.nsf/V...F003CE1F6/$file/KingsmenSGXAnnouncementFYFINAL.pdf?openelement [FY10 results announcement]
http://info.sgx.com/webcoranncatth.nsf/V...F003CE1F6/$file/KingsmenFY10NRFINAL.pdf?openelement [Press release]

Considering in FY09 Kingsmen completed a jumbo (approx. $78.0m) contract for Universal Studios Singapore, I believe Kingsmen has done very well in FY10, even though revenue fell 2.8% to $235.19m, and PBT at $19.712m (+4.1%) and NP at $15.066m (+1.1%) were only marginally higher.

I think it is important to note that in FY10 Kingsmen achieved very healthy increases in business volume from key overseas markets - especially Greater China, US & Canada, Malaysia, Vietnam, Indonesia, and rest of Asia. [Full details are shown under Note 13 in the results announcement.]

So as far as overseas expansion is concerned, Kingsmen is no longer like a patrol vessel or missile corvette operating close to Singapore; it is now like a frigate capable of transiting big oceans and reaching faraway destinations. A relevant question: Would Kingsmen become like aircraft carrier in the future?

A higher total $0.025/share (comprising a $0.02/share Final and a $0.005/share Special) in dividends declared, which, when added to the $0.015/share Interim paid, will give a total payout of $0.04/share for FY10 (vs. $0.035/share in FY09).

Based on Kingsmen's FY10 EPS of $0.0793 and today's closing share price of $0.56, Mr Market is now pegging Kingsmen to a historical PER of only 7.06x. Shouldn't a fine company like Kingsmen be pegged at a higher PER of 10x (at least!) on current year's forecast EPS??

[freedom]

difficult for Kingsmen Creative to have a PE of 10x or above imo, given that:

1) it is still quite project-based.

2) relatively small revenue, 200+ million only.

3) relatively small market cap and low liquidity. around 100 mil SGD only and majority owned by managements. difficult to attract institutions or big funds. it may take years for institutions to have a meaningful stake.

[Musicwhiz]

Business Times - 23 Feb 2011

Kingsmen posts $15.1m profit

The group also announces dividend of 2.5cents per share

By VEN SREENIVASAN

INTERIORS and design specialist Kingsmen Creatives unveiled flattish full year profit growth but announced a generous dividend to mark its 35th anniversary.

The mainboard company posted $15.1 million in earnings for the year ended Dec 31, 2010, just 1.1 per cent up from the previous year's $14.9 million.

This was achieved despite a 2.8 per cent drop in topline revenue to $235.2 million, from $242 million a year earlier.

But the group announced a dividend of 2.5 cents per share, comprising a final dividend of two cents and a special dividend of half a cent to mark its 35th anniversary.

Based on its closing share price of 56 cents yesterday, this payment alone works out to a yield of 4.5 per cent. Combined with the interim dividend of 1.5 cents declared in August 2010, the total dividend per share for FY10 is four cents.

Commenting on the results, group executive chairman Benedict Soh said: 'As expected, 2010 was a challenging year for us as we sought to fill the vacuum left by the completion of the Universal Studios Singapore project in 2009. Our divisions have done well to fill the gap, and we are well positioned to ride on the recovery and the influx of business and interest into Asia.'

'Moving forward, we envisage that our growth will be driven by our overseas offices, as they strengthen their competencies and deepen their relationships with international brands,' he added.

With the completion of the $78 million worth of jobs at Universal Studios Singapore, the company's Exhibitions & Museums division posted a revenue of $105.2 million last year, down from $137.4 million in FY09.

Its Interiors division continued to perform well, posting a 24.5 per cent rise in revenue to $116.6 million, thanks to a steady pipeline of retail interiors rollouts in Singapore, China and across the region.

Its Research & Design division's revenue grew 11.7 per cent to $6.4 million in FY10, while revenue from its IMC division increased from $5.2 million to $7.0 million.

The company has $84 million worth of contracts in hand, of which $70 million will be recognised this year. It recently clinched several thematic projects including Universal Studios Singapore, Gardens by the Bay and the Hong Kong Disneyland Extension.

Anticipating strong growth in China, the company is boosting its presence there by setting up a more integrated production facility in Beijing which will be fully operational by the second half of this year.

'Moving forward, we are confident of continuing this momentum as we are at the heart of the Asian led global recovery with the key markets we cover indicating strong economic growth in the coming years,' Mr Soh added.

[hongonn]

Basically not bad for this set of result.

1. Gross and net margin has improved slightly. Revenue maintained with the absent of Universal Studio $78m.

2. Improved cash flow, plenty of cash now, cash per share is $0.15. 26% of current share price $0.56.

3. Dividend is even better 7% yield now.

4. Secured a few projects, Universal Studio Singapore Phase 2, Gardens by the Bay and the Hong Kong Disneyland Extension. I expect these going to be the revenue drivers for coming year. How come they don't announce it earlier or i miss it?

5. Order book $84m, is it better than last year? 36% of their annual revenue, don't seem very high to me.

6. PE is only 7x, hmm, don't mind getting it just for the dividend. 7% is very hard to get now for a common stock.

[valuestalker]

Basically not bad for this set of result.
>> indeed, i am satisfied with the FCF, 18% more than my expected FCF

1. Gross and net margin has improved slightly. Revenue maintained with the absent of Universal Studio $78m.
>> Interiors division margin is historically higher.

2. Improved cash flow, plenty of cash now, cash per share is $0.15. 26% of current share price $0.56.
>> minus debt, it will be $0.13

4. Secured a few projects, Universal Studio Singapore Phase 2, Gardens by the Bay and the Hong Kong Disneyland Extension. I expect these going to be the revenue drivers for coming year. How come they don't announce it earlier or i miss it?
>> I think they announced some times back that they won't announce any orders secured.

5. Order book $84m, is it better than last year? 36% of their annual revenue, don't seem very high to me.
>> order book $84m is new order secured in 2011 or total outstanding order? anyone?