Noel Gifts International

[dydx]

I have just finished reviewing the latest FY10 (ended 30Jun10) AR, which makes very interesting reading.....
http://info.sgx.com/listprosp.nsf/6c6be9...f0013aa49/$FILE/Noel%20review%20%20new.pdf [Section 1 - Chairman's Statement + others]
http://info.sgx.com/listprosp.nsf/6c6be9...f0013aa49/$FILE/Noel-AR10%20Financial%20new.pdf [Section 2 - Audited Accounts + others]

This year, Noel Gifts is celebrating its 35-year anniversary (since the business started in 1975 by MD Alfred Wong), and has declared a total $0.015/share in dividends - comprising a $0.007/share Final and a $0.008/share Special - payable on 18Nov10, with ex-date fixed on 27Oct10.

With Singapore's economy holding up, I believe Noel's well-established gifts business is poised to do well in the rest of 2010 and into 2011. The 25%-owned associate First Balmoral Development P/L has started selling its condo units in the Balmoral Crest and contributing profits to Noel's P&L. If we start counting the potential hidden profits from Balmoral Crest and Noel's other property assets, as well as Noel's growing cash reserve plus quoted investment (amounting to $12.55m in total as at 30Jun10), it is quite clear that Noel's NAV/share of $0.2504 (as at 30Jun10) is very conservative.

I suppose that's why some investors have been buying up Noel shares lately.

[dydx]

Just checked my bank account and noted a nice credit from Noel's $0.007/share Final and $0.008/share Special dividends for FY10. Feeling great!

With Singapore's economy looking up, the coming Christmas and CNY giving season should be good for Noel Gifts and subsidiary Humming Flowers & Gifts.....
http://www.noelgifts.com/index.php?t=128...df28d48359
http://www.hummings.com/index.acv

[ngcheeki]

Based on the news reported in today newspaper on 18 Dec 2010, Noel gifts' earning and profit for 1H of this year is likely better than last year. The following is extracted from the report:

"At Noel Gifts International, hampers priced $500 and above are seeing a brisk 40 per cent increase in sales compared to last year, said the gift company's business development manager Kim Wong. In fact, the top-selling item is a premium "Pinnacle" collection - a 2m tower of imported chocolates, champagne and gourmet cheese crackers that can cost up to $950 per package."

See the following link for more information.
http://www.todayonline.com/Singapore/EDC...ig-spender

Vested

[dydx]

Just by taking occasional tours on Noel's and Hummings' websites will tell us that their gift ideas are becoming better and more comprehensive all the time.....
http://www.noelgifts.com/index.php?t=128...df28d48359
http://www.hummings.com/index.acv

[ngcheeki]

The Full Year result is finally out!!!

EPS of FY2011 3.57 cents compared to previous year (FY2010) 3.59 cents
NAV of 27.19 cents compared with 25.04 cents
Dividend remains the same of 1.5 cents consist of 0.7 cents ordinary and 0.8 cents of special. This translate of dividend yield of 8.5% based on last transacted price of 17.5 cents.

See the following for more detail:

http://info.sgx.com/webcoranncatth.nsf/V...B00471554/$file/NoelFY2011.pdf?openelement

[corydorus]

The income tax expense seems a bit low. Any idea why ?

[dydx]

This well managed and positioned small local niche business has never failed to deliver its promise so far. Rock-solid B/S with over $13m of cash reserve and available-for-sale investments, plus some $12m (book value) in investment properties - including a share in the remaining unsold units in Balmoral Crest held under an associate - which will likely fetch more if realized at CMV. So every of the 102.476m NGI shares is backed by reserve assets alone amounting to at least $0.25, before counting the value of the operating gifts business.

Based on FY11's EPS of $0.0357, and assuming NGI's earnings just stay the same in FY12, we get a prospective yearly return of 20.4% (based on the last done share price of $0.175) from the business, before counting the nearer-term return from the just declared $0.015/share FY11 Final+Special dividends. Of course, Mr Market may just wake up suddenly and decide to price the NGI share closer to its justified fair value, which rationally should be at a good premium over its latest NAV/share of $0.2719.

[changwk]

hi,

Noel Gifts has several properties under it's name. Are they being rented out for rental income?
- 12 units at 50 Playfair Road
- 1 unit at 33 Rochester Drive

[dydx]

Noel Gifts has several properties under it's name. Are they being rented out for rental income?
- 12 units at 50 Playfair Road
- 1 unit at 33 Rochester Drive

I guess you got the above info from p108 of the FY10 AR.....
http://info.sgx.com/listprosp.nsf/07aed3...f0013aa49/$FILE/Noel-AR10%20Financial%20new.pdf

From Note 23 on p82, we know in FY10 NGI received property rental (as part of total revenue) of $230k, presumably all from the flatted factory units at 50 Playfair Road, as the "The Rochester" condo project at 33 Rochester Drive was completed only in 2010. More info on The Rochester....
http://www.iproperty.com.sg/singaporeCon..._rochester

While $230k in yearly rental is a small amount, I believe the factory units (tenure: freehold strata titles) at 50 Playfair Road can turn out to be highly valuable because of the redevelopment potential of the land site, which is located only approx. 150 metres from Tai Seng MRT Station on the new Circle Line.....
http://maps.google.com.sg/maps?rlz=1T4AD...CBoQ8gEwAA

I believe NGI also benefits from rental derived from the remaining unsold units in Balmoral Crest which are held under 25%-owned associate, First Balmoral Development P/L. The units fetched over $1,600psf based on past sale transactions. More details on Balmoral Crest....
http://www.propertyguru.com.sg/project/b...crest-1175

[yyt]

dydx, you've got me interested in this counter.

Btw, from what i see, top 20 share holders are more or less individuals.
Since liquidity does seems to be relatively low, coupled with such a distribution in shareholdings, would you agree that the chance of revaluation of this counter upwards towards the NAV is going to be pretty slim?

Or do you mean a revaluation by means of a privatisation by Mr Market, LOL?