SPH – Lim and Tan

  • The final dividend of 17 cents (normal 9 and special 8) brings the total for the fiscal year ended Aug ’12 to 24 cents (unchanged from the year before), for a yield of 5.9%.
  • This would have been a greater plus if the board had committed to a clearer dividend policy, of say a minimum or a certain percentage of recurring earnings, even if it were to mean a lower yield.
  • Note that the $386.37 mln dividend in respect of ye Aug ’12 already represents 94% of recurrent earnings.
  • Results for ye Aug ’12 (net profit down 5.9% to $365.54 mln) are in line with recent past, with decline in the core newspapers / magazines business being offset by property contributions. (The latest decline was also blamed on the drop in investment income.)
  • Classified advertisements (almost 30% of display ads) continued to decline, by 8% in the latest fiscal year.
  • Contributions from the Clementi Mall have replaced Sky @ 11, adding to Paragon. (The Seletar Mall, a 70-30 JV with UE is scheduled for completion in late calendar year 2014.)
  • The 5.9% yield remains the sole reason for maintaining BUY.

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