Kingsmen Creatives

[Musicwhiz]

I took 1.5c interim and 1.5c final for my computation in my previous post. I assumed 2c is not sustainable in the medium term. Just to clarify.

Dear all, my Analysis of Purchase Part 2 for Kingsmen Creatives is now up on my blog. Please feel free to visit and leave comments, thanks!

A snippet as follows:-

"One should also note that revenues have been steadily rising over the years, as Singapore and the South-East Asian region become more and more of a hub for MICE events and also for international brands to set up shop. The boom in Singapore, Hong Kong and China has attracted many luxury brand names to set up retail outlets and boutiques; and this has enlarged the pie for all players in the fittings industry. The volume of MICE events, exhibitions and other major events such as Formula 1 has also increased tremendously as the two Integrated Resorts open their doors in FY 2010; and this will be a permanent platform for the Company to tap on for recurring revenues. In short, Singapore has changed permanently and the market for MICE events is much larger than it used to be."

[Musicwhiz]

Dear all, my Analysis of Purchase Part 3 for Kingsmen Creatives is now up on my blog. Please feel free to visit and leave comments, thanks!

A snippet as follows:-

"Kingsmen also has experience in thematic and scenic construction, from its experience with the Universal Studios Theme Park. This enables it to enter a new business segment within its Museums and Exhibitions division, and start to bid for theme parks in South-East Asia. Universal Studios also recently announced, on Jan 19, 2010, that they plan to build its largest theme park in South East Asia in South Korea at a cost of S$3.7 billion. There are also plans by China and the Middle East to build theme parks in the next couple of years, and these present opportunities for Kingsmen to grow their business."

[tonylim]

KINGSMEN CREATIVES LTD.(Company Registration No: 200210790Z)

Fire at the Group’s Factory Premises in Kuala Lumpur, Malaysia
The Board of Directors of Kingsmen Creatives Ltd. (the “Company” and together
with its subsidiaries, the “Group”) wishes to announce that on 21 April 2010, a fire
broke out at the rented factory premises of its Malaysian units operating under
Kingsmen Sdn Bhd and its subsidiary companies (“Kingsmen Sdn Bhd Group”),
in Kuala Lumpur, Malaysia (“KL Factory Premises”), causing damage to the KL
Factory Premises.

The Board wishes to inform that there has been no fatalities caused by the fire and
the KL Factory Premises have been insured under the Group’s fire insurance policy.
As at the date hereof, the Company is unable to ascertain with certainty the total
losses suffered as a result of the fire but estimates that the book value of the
equipments and machineries damaged to be not more than S$1 million. As at the
date hereof, the Company is also unable to ascertain with certainty the amount
which can be recovered for the losses suffered under the Group’s existing fire
insurance policy. Despite the damage caused by the fire, the business and
operations of the Kingsmen Sdn Bhd Group will still be ongoing.
The Board is monitoring the situation closely and will make an appropriate
announcement to update on the situation.

BY ORDER OF THE BOARD
Benedict Soh Siak Poh
Executive Chairman
21 April 2010

[Aspellian]

Lucky no casualties. Maybe some old inventory of billboards and planks and planks of woods and old machines that have been overworked doing IR designs are all burn down, so now with insurance income - can buy all the new stuff! hahaha! timing perfect~!

[Blackjack]

Reminds me of the movie Just Follow Law...

[millionairemind]

Published May 14, 2010

Kingsmen's Q1 net profit dips 2.5%

Higher income tax expense drags down earnings

By JAMIE LEE

KINGSMEN Creatives posted a 2.5 per cent dip in first-quarter net profit, dragged by a higher income tax expense.

The company - which designs pavilions and booths used at exhibitions - said net profit for the three months ended March 31, 2010, was $2.29 million compared with $2.35 million a year ago.

This translated to earnings per share of 1.21 cents for the quarter, compared with 1.24 cents a year ago.

Gross profit rose 27.6 per cent to $12.3 million, helped by a boost in sales.

Revenue surged 30.8 per cent to $46.7 million, thanks mainly to its exhibitions and museums division, which made up nearly 60 per cent of total sales.

This division's revenue surged 34.3 per cent from a year ago to $27.4 million due to projects and works for events such as the Singapore Airshow 2010, Universal Studios Singapore and Shanghai World Expo.

Its interiors division - which looks into the furnishing of retail outlets - registered 28.1 per cent in crease in revenue to $17.3 million, thanks to contributions from brands such as Burberry, Polo Ralph Lauren and Tiffany & Co, and recurring revenue from the export of fixtures.

But the company registered a 95.2 per cent jump in income tax expense to $609,000. Included in the expense is an under-provision of income tax relating to prior years of $4,000 (March 31, 2009: over-provision $63,000).

'Other income', including items such as fee incomes, Jobs Credit grant and net foreign exchange gain, fell from $1.8 million to $672,000.

As at May 12, the company has been awarded contracts of about $133 million. Out of that order book, $119 million, or 89.5 per cent, is expected to be recognised in this fiscal year.

No dividend was declared for the period.

Shares of Kingsmen closed unchanged at 58 cents yesterday.

[Musicwhiz]

If we remove the exchange gains for 1Q 2009, bad debts recovered (also one-off) and the one off jobs credit (all for 1Q 2009); as well as the higher income tax expense due to under-provision (one time), there is some profit growth. Margins are about 6% assuming income tax reverts back to $300K+. Note that 1Q is traditionally Kingsmen's weakest quarter.

Overall, the Company did decently. Though revenue increased 30.8%, staff costs only increased 16.1% and other expenses increased by just 9.2%. Trade Receivables also dropped a lot, reflecting cash collected from their Universal Studios contract. Note that PBT actually increased 11% before the tax came into the picture.

Balance Sheet is healthier with a larger cash balance of about S$28.1 million, though loans increased to about S$4 million+ to acquire two factory units in Selangor (for fitting out works development, no doubt).

Cash Flow Statement is also very healthy as there was +ve operating cash flows of S$6.4 million, against capex of S$4.8 million, indicating that FCF of S$1.8 million was generated.

Moving forward, their order book as at May 12 is S$133 million, of which S$119 million is expected to be recognized in FY 2010. They are also bidding for contracts for scenic and thematic works, so hopefully we can hear of some good news on this aspect.

In the meantime, with healthy cash flows, I guess I can look forward to a decent interim dividend come Aug when they announce their 1H FY 2010 results!

[Musicwhiz]

It seems many of the heartland malls are opening soon with hip high end brands like Uniqlo, Cotton On and even Robinsons! Many more opportunities for Kingsmen to do fitting out, starting with Bedok Point officially opening later this year. This is in addition to the revamp of Orchard Road which is currently taking place in which many retail shops plan to refurbish or set up new outlets along the Orchard Road belt, further enhancing the Company's prospects....

May 16, 2010
Rise of the mall in the suburbs
More heartland shopping centres opening, others are revamped or expanded, thrilling residents
By Irene Tham & Ng Hui Ying

The flashy facades carry the logos of hip brands like Topshop, Mango, Uniqlo and Bakerzin.

Inside, the warmly lit, swanky interiors and a diverse retail mix put you in a good mood to spend.

But you are not in an Orchard Road mall.

Welcome to the bright new world of heartland shopping centres, even while their downtown cousins - Ion Orchard, Mandarin Gallery, Orchard Central and 313@Somerset, which opened last year - may have hogged more limelight.

Suburban malls are gaining strength in numbers, with new ones slated for Serangoon, Bedok, Clementi and Jurong. Existing ones, from Parkway Parade to Jurong Point, have been expanded and spruced up.

Why the big rush to the heartland?

Experts point to suburban malls' strong resistance to the effects of a recession.

Said Mr Colin Tan, research and consultancy director of property consultancy Chesterton Suntec International: 'Unlike downtown malls, suburban malls have their own captive catchment, which isn't affected by global situations.'

As downtown malls are dependent to some extent on tourist arrivals, takings are at the mercy of the volume of tourist arrivals, said Mr Nicholas Mak, a real estate lecturer at Ngee Ann Polytechnic.

And scares like the bird flu or terrorist activity may send tourist numbers heading south.

'Consumer spending at suburban malls may fluctuate with economic developments. But it would not be as volatile as that at Orchard Road malls where there may be a boom for six months and then a sudden dip,' Mr Mak said.

Big brands certainly know the value of a reliable stream of earnings from heartland branches. Japan's clothing brand Uniqlo saw fit to set up its first store last year in Tampines One. It has since branched out to 313@Somerset and Ion Orchard.

The well-loved Robinsons department store could soon be in a heartland mall too.

The brand's owner, Dubai-based Al-Futtaim Group, was in talks with landlords, Robinsons chairman Jim McCallum had reportedly said. It now operates from Centrepoint and Raffles City.

For an idea of how much Singaporeans love their shopping, look no further than the annual Great Singapore Sale in June. Last year, a total of US$26.3 million (S$36.5 million) was spent by Singaporean MasterCard cardholders in the first weekend of the Great Singapore Sale - 7 per cent up from 2008.

But given that a mall exists in almost every heartland town now, mall owners have had to slug it out for supremacy. They are spending hundreds of millions to build extensions, reconfigure interiors and carve out new retail space from empty land.

Take CapitaMall Trust, which jazzed up Lot One in Choa Chu Kang with a new four-storey annex block in May last year. That added 50 shops, including Courts, MOS Burger, SK Jewellery and New York New York.

A CapitaMall spokesman said its portfolio of mostly suburban malls, like Junction 8 in Bishan and Tampines Mall, helped the firm weather the financial crisis last year. For the year ended Dec 31, its distributable income rose 18.3 per cent to $281.97 million while gross revenue grew 8.2 per cent to $552.7 million. 'The (suburban) malls maintained high occupancy rates and positive rental reversions, and provided income stability,' said the spokesman.

Other mall operators are not shying away from protecting their turf. Frasers Centrepoint Trust invested $38.6 million to put up a new wing at Northpoint.

The work, completed in late 2008, increased the size of the mall by more than 50 per cent to 235,000 sq ft and the number of shops from 90 to 168.

'Suburban malls serve a population residing within 3km to 5km around the mall. By fulfilling the daily requirements of shoppers with supermarkets and food-and-beverage offerings, suburban malls entrench themselves in the community,' said Ms Wendy Low, general manager at Frasers.

She said Northpoint draws more than 2.4 million visitors every month.

In the west, Jurong Point's new 303,000 sq ft extension made it Singapore's largest suburban mall. Opened early last year, the extension was built on formerly empty land as part of a $720 million project that included an air-conditioned bus interchange and a 610-unit condominium above the new wing.

Existing tenants said they benefit from the extensions and revamps. Most of the tenants at Jurong Point, Northpoint, Lot One and Tampines Mall told The Sunday Times they have enjoyed more traffic - some by up to 80 per cent.

A sales staff member at Lee Hwa Jewellery - an existing tenant at Northpoint - said business has sparkled. It is up 30 per cent to 40 per cent since the revamp.

Is shopping in suburban malls entering prime time? Shoppers said 'yes'. 'Now, it's a lot easier to get the things I want, from outlets like Cotton On and Aries,' said Fatrisyah Adina, 16. The student gets her retail fix at Lot One once every two weeks. She said Orchard Road is too far away for her liking.

For Madam Jacqueline See, 55, family outings are taking place closer to her Boon Lay home.

The property agent, who used to visit Jurong Point only occasionally, now goes there for meals thrice a week. 'I'm spending a lot more on food here,' said Madam See, who keeps the tills at Swensen's, Ichiban Sushi and Kuishin Bo ringing.

[email protected]

[email protected]
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OPENING SOON IN THE HEARTLAND

Bedok Point

Location: Bedok Central, near Bedok MRT station

Managed by: Frasers Centrepoint Malls

Size: Six storeys, 81,000 sq ft

Tenants: 90, including K-Box, Paradise Inn, Timezone, Pet Lovers Centre, Popeyes and The Manhattan Fish Market

Official opening: Fourth quarter of this year

Nex

Location: Serangoon Central, near Serangoon MRT station

Managed by: Guthrie Consultancy Services

Size: Six storeys, 600,000 sq ft

Tenants: More than 95 per cent of space leased to close to 300 tenants, including Isetan, Shaw Cineplex, FairPrice Xtra, Courts, Pet Safari and National Library Board.

Official opening: Next March, with a soft opening this November

Clementi Mall

Location: Clementi Avenue 3, next to Clementi MRT station

Managed by: CM Domain, a joint venture between Singapore Press Holdings, NTUC Income and NTUC FairPrice

Size: Five storeys, 190,000 sq ft

Tenants: National Library Board. Negotiations ongoing with other tenants

Official opening: Early next year

Jurong Entertainment Centre

Location: Jurong East Central, near Jurong East MRT station

Managed by: CapitaMalls Asia

Size: 200,000 sq ft

Tenants: An Olympic-size ice skating rink. Negotiations with tenants ongoing

Official opening: Early 2012

[Musicwhiz]

Dear all, my analysis and review of Kingsmen Creatives' 1Q 2010 Financial results has now been posted on my blog. Kindly leave comments if you wish, thanks!

A snippet as follows:-

"As can be seen in the above table, I have plotted Kingsmen’s original Profit and Loss Statement, and at the side I have shown another Income Statement but removed the one-off items which are found in “Other Income”. I have also normalized the tax expense to be in line with the adjusted profit figure in terms of % increase in Profit Before Tax (“PBT”) of 55.4%; these lines are highlighted in grey."

[Musicwhiz]

Kingsmen Creatives (KC) released their 1H 2010 results today.

Revenues for 2Q 2010 were up 22% year on year, with gross profit up 13.1% year on year for 2Q 2010. Net profit was up 30.2% for 2Q 2010 and up 17.2% for 1H 2010. An interim dividend of 1.5 cents/share was declared, similar to 1H 2009. Free Cash Flows were about S$8 million, and Cash Balance in Balance Sheet stands at S$32 million, with about S$5 million of loans (net cash of S$27 million). Balance Sheet remains solid with current ratio at 1.50.

The Company expects prospects to remain steady for 2H 2010 and business to remain brisk with more work expected for USS (2nd and 3rd phase) and numerous fitting out of Interiors for many shops in Orchard Road and Marina Bay Sands.

With healthy operating cash inflows and very low capex requirements, the company should continue to generate good FCF to reward shareholders with dividends.

Historical dividend yield based on today's closing price of 59 cents is 5.9%.

Vested.