Colex

[Muser]

Disappointing. FY17 results poor sales & profit growth. Lost Pasir ris contract to 800 Super (worth $193mil). Future growth depends on retaining existing contract & winning new ones, which may not be easy given many competitors & rising costs. Regulated wage costs going up. Danger of low growth over next few years even with good financials (zero debt, +ve FCF etc.). Has to expand market (maybe go overseas), add new services, make acquisitions to deliver decent (say 5-10%) sales & profit growth every year. 800 Super may end up doing better - it has a wider bouquet of services, higher revenues, and momentum given the new 8-year contract it was won. Colex needs catalysts soon, else it risks being a promising company which goes nowhere.

[karlmarx]

The most disappointing is the lack of a sustained increase in dividends.

Dividends in cents
FY13: 0.50
FY14: 0.50
FY15: 0.55
FY16: 1.10
FY17: 0.55

So what if the company earns much more each year, if shareholders don't get higher payouts.

Thankfully, the market is willing to buy up its shares to give capital gains to shareholders.

[CY09]

One must be aware that Colex is tightly held by its parent, Bonvests.

Colex is a cash generating company. Even in its reduced state of profits and in turn, cashflow, it was still able to sustain its FY16 dividends. The problem is that its parent company is not in need of money and hence dividends need not flow upstream. We have seen in many cases such as in Vicom, when CDG was not in need of money, the payout ratio of Vicom was much lower. However as CDG got into a tense fight in the taxi industry, its parents started pumping money from Vicom to the parent company, CDG.

This happened too in M1 case. To summarise, for many subsidiaries held by a parent, one must think of the actions of the parent company before investing

[cyclone]

Result of Refuse Collection License for the Jurong Sector by NEA

The Board of Directors of Colex Holdings Limited refer to the Company’s unaudited consolidated half year results announcement for the financial period ended 30 June 2019 released on 5 August 2019, in which it was stated in paragraph 10 of the Results Announcement that the Company had, through its wholly-owned subsidiary Colex Environmental Pte Ltd (“CEPL”), participated in the NEA tender for licence to provide refuse collection services to domestic and trade premises in the Jurong sector in Singapore for a period of 7 years commencing 1 April 2020.

The Company wishes to announce that CEPL was not awarded the aforesaid refuse collection licence.

The result of the tender is not expected to have any material impact on the consolidated net tangible assets per share and/or earnings per share of the Group for the financial year ending 31 December 2019.

[fallscushion]

This should be quite a significant hit to the top line.
No impact to current Financial Year, alright.
But can't they estimate roughly what's the impact to future revenue?
I guess it's not that hard for Management to have a ballpark figure even before the result came in?
It shows the Management's attitude towards the Minority Shareholders??
Which is basically "don't care"?

[karlmarx]

I think the implication is quite clear to anyone who understands Colex's business

Colex was the lowest bidder at $145m, but the contract was awarded to Alba -- of German origin, who has been bidding since the past few contracts renewals were put up for tender -- which bid at $165m. NEA probably thinks that Alba can deliver more value despite the higher price.

I believe NEA wants its vendors to introduce more tech and innovative approaches in waste collection and recycling, and not just deliver services at the lowest cost. It has already announced its desire to see an increase in the rate of recycling from consumer waste. Apart from periodic renewal of its collection fleet, Colex has not demonstrated -- at least publicly -- any new initiatives in its operations, for the past decade or so.

Henry Ngo has been neglecting the business. Which does not come as a surprise, given the small proportion Colex contributes to his entire wealth.

Colex will not be the only tired and slow-moving company to be left behind. Among the banks, Hong Leong Finance -- which has been reported to have applied for a digital banking license, even as it still relies on facsimile in its daily operation -- is likely to get further relegated from the main pack.

[cif5000]

I think the implication is quite clear to anyone who understands Colex's business

Colex was the lowest bidder at $145m, but the contract was awarded to Alba -- of German origin, who has been bidding since the past few contracts renewals were put up for tender --  which bid at $165m. NEA probably thinks that Alba can deliver more value despite the higher price.

I believe NEA wants its vendors to introduce more tech and innovative approaches in waste collection and recycling, and not just deliver services at the lowest cost. It has already announced its desire to see an increase in the rate of recycling from consumer waste. Apart from periodic renewal of its collection fleet, Colex has not demonstrated -- at least publicly -- any new initiatives in its operations, for the past decade or so.

Henry Ngo has been neglecting the business. Which does not come as a surprise, given the small proportion Colex contributes to his entire wealth.

Colex will not be the only tired and slow-moving company to be left behind. Among the banks, Hong Leong Finance -- which has been reported to have applied for a digital banking license, even as it still relies on facsimile in its daily operation -- is likely to get further relegated from the main pack.

Does that mean households will have to pay more when the new contract kicks in?

Is this tender also for recycling?

Has the other 3 PWCs (Veolia, Sembcorp, 800 Super) demonstrated new initiatives in refuse collection?

[ZZF]

I think the implication is quite clear to anyone who understands Colex's business

Colex was the lowest bidder at $145m, but the contract was awarded to Alba -- of German origin, who has been bidding since the past few contracts renewals were put up for tender --  which bid at $165m. NEA probably thinks that Alba can deliver more value despite the higher price.

I believe NEA wants its vendors to introduce more tech and innovative approaches in waste collection and recycling, and not just deliver services at the lowest cost. It has already announced its desire to see an increase in the rate of recycling from consumer waste. Apart from periodic renewal of its collection fleet, Colex has not demonstrated -- at least publicly -- any new initiatives in its operations, for the past decade or so.

Henry Ngo has been neglecting the business. Which does not come as a surprise, given the small proportion Colex contributes to his entire wealth.

Colex will not be the only tired and slow-moving company to be left behind. Among the banks, Hong Leong Finance -- which has been reported to have applied for a digital banking license, even as it still relies on facsimile in its daily operation -- is likely to get further relegated from the main pack.

Hi Karl, thanks for the info. May I know where u get the tender figures from ? Tried to search but could not find

[karlmarx]

Does that mean households will have to pay more when the new contract kicks in?

Is this tender also for recycling?

Has the other 3 PWCs (Veolia, Sembcorp, 800 Super) demonstrated new initiatives in refuse collection?

1) In the past, households pay a rate that is dependent on how much their PWC bid for the contract. A household in Tampines pays a different rate from a household in Jurong. Now, all households pay a Uniform Fee, which was introduced some years back, to ensure that all households pay a rate that is standardised to their type of dwelling. This only applies to HDB and landed properties. Condos can choose to use the appointed PWC, or their own vendor.

The difference between what households pay, and how much the vendors bid, may be a surplus to be enjoyed, or deficit to be burdned, by NEA. I cannot find public information on this.

2) The tender includes the collection of recyclables. Which is the blue bin you see at HDB void decks, or outside landed properties. Because waste and recyclables they have different destinations, they are collected separately. The collected waste is disposed at incineration plants. Most of the recyclables in the past was sorted, packed into bales, and shipped to China. So when plastic and aluminium prices are high, the collection of these recyclables is profitable. 

Due to falling prices, and the refusal of China and numerous countries to accept recyclables, some operators simply dispose them the same way as they do waste; at the incineration plant. This is not profitable since they have to pay to dispose them, instead of being paid, as in the past.

3) There are probably too many to list here. You can do a google of the companies you mentioned. Not all of the initiatives are game-changing, or even still practiced, but they are signals to the government of their willingness to test new ideas to meet NEA's broad objectives.

As an aside, I expect most of the drivers to be re-employed by the new vendor. But most of the fleet and plant are probably going to be disposed.

[karlmarx]

Hi Karl, thanks for the info. May I know where u get the tender figures from ? Tried to search but could not find

You can find it on gebiz. 

All public tender from government ministries and agencies are there. You can't see the tender documents, but you can see what is being offered for tender, who has tendered, how much they tendered, and who was awarded the tender.