Author: tfwee
SPH – UOBKH
FY07 Results
Singapore Press Holdings (SPH) reported its full year results. Net profit was up 18.1% to S$506.2m. However, after excluding exceptional gains of S$66.8m in FY06, net profits actually increased by 40%. Overall, results were in line with expectations.
Maiden earnings contribution from Sky@eleven
SPH recognized approximately 11% of its profits for its property development project, the sky@eleven. SPH recognized S$71.3m in sales and S$94.8m in pre-tax profits for this project. Percentage of completion was higher than our expectations but profitability of the project was in-line with pre-tax margins at 67.1%.
Print revenue and property exceeded expectations; other segments in-line
• Print revenue in 4Q07 increased by 11.2% yoy to S$184.4m
• Print revenue for FY07 increased by 7.2% S$725.1m
• Rental income from the Paragon in 4Q07 increased by 8.9% to S$27.7m
• Rental income from the Paragon in FY07 increased by 7.9% to S$106.5m
Management attributed the stronger than expected growth in print revenue to higher yields in advertising due to an increase in the proportion of colour advertisements. Rental income at the Paragon also improved due mainly on the back of the strong property segment. Going forward, management has indicated that they do not have any plans to sell the Paragon. EBITDA margins excluding the Sky@eleven for FY07 was 41.6% as compared to 41.8% in FY06 as increases in staff costs were in line with SPH’s higher operating profits and newsprint costs remaining largely unchanged.
Final & Special Dividend
SPH has declared a final one-tier tax exempt dividend of 9 Scents and a special one-tier tax exempt dividend of 10 cents. This brings the total dividend paid out for the year to 26 Scents, slightly below our expected full year pay out of 27 cents.
Maintain BUY: Target Price raised to S$5.35
We have raised our valuation of SPH to S$5.35 based on our sum-of-the-parts valuation. Based on the current share price and our earnings forecasts, SPH should offer investors a dividend yield of 7.1%, 7.4% and 7.6% in FY08, FY09 and FY10 respectively. Maintain BUY
SPH – BT
SPH beats forecasts with 18% profit rise
SINGAPORE – Singapore Press Holdings, Southeast Asia’s biggest newspaper publisher, on Friday raised the possibility of selling its telecom assets after it posted a better-than-expected 18 per cent rise in net profit.
Singapore’s dominant newspaper publisher also gave a positive outlook for its print advertising revenue, citing a generally healthy economic environment and the recognition of earnings from property development.
‘Our minds are open to discussion,’ Alan Chan, chief executive officer of SPH, said when asked about plans to sell stakes in StarHub and MobileOne.
However, he said StarHub also offers good dividend yields and capital reduction possibilities, while MobileOne also paid good dividends.
SPH said it earned $506.2 million (US$346 million) in net profit for the financial year ended Aug 31, up from $428.5 million a year earlier when it booked an exceptional gain of $66.8 million.
Its earnings beat the $462 million median forecast of 12 analysts polled by Reuters Estimates.
SPH owns 13.9 per cent of MobileOne, the No. 3 mobile operator in Singapore, and also holds a 0.8 per cent stake in StarHub, Singapore’s second-largest telecoms firm.
The publisher’s stakes in MobileOne and StarHub were worth about $263 million and $43 million respectively, based on the number of shares held in these companies according to Reuters ownership data and Friday’s closing stock price.
SPH’s net profit for the fourth quarter was about $126 million compared with $70.9 million a year earlier, according to calculations by Reuters.
The 2006/2007 earnings included maiden profit contributions of $47.8 million from SPH’s condominium development near Thomson Road in central Singapore, the company said.
SPH’s revenue for the 12 months rose 13.7 per cent to $1.17 billion, aided by a 5.8 per cent gain in revenue from newspapers and magazines to $959.4 million, and an 80 per cent increase from its property businesses to $177.8 million.
The company recommended a final dividend of 19 Singapore cents a share, up from 17 cents a year earlier. — REUTERS
SPH – Press Release
SINGAPORE, 12 October 2007 – Singapore Press Holdings Limited (SPH) today reported its full year results for year ended 31 August 2007. Net profit was up 18.1% to $506.2 million compared to previous year’s $428.5 million which included an exceptional gain of $66.8 million. Operating profit* rose by 20.2% to $434.2 million. This included the maiden profit of $47.8 million from sale of the Sky@eleven condominium recognised on a percentage-of-completion basis.
The Group’s operating revenue climbed 13.6% to $1.16 billion. Newspaper and Magazine operations increased 5.8% to $959.4 million on the back of a strong 7.2% growth in print advertisement revenue to $725.1 million. Revenue from Property operations surged 80.2% to $177.8 million with the inclusion of $71.3 million from Sky@eleven and an increase of $7.8 million from Paragon’s rental income growth.
Total operating expenses increased by 10.1% to $738.3 million. Property development costs of Sky@eleven accounted for $23.5 million while staff costs were higher by 12.5% or $33.6 million as a result of variable bonus provision, increased headcount and annual salary increment. Variable bonus provision was in line with the Group’s higher operating profits and the Group’s new performance-based incentive scheme. Total headcount in August 2007 was 3,735 compared to 3,585 a year ago because of the acquisition of new subsidiaries and staffing for new media businesses.
Group investment income was up 79.0% to $146.2 million. This comprised mainly net profit on sale of investments and profits from capital reduction exercises by Starhub Limited and MobileOne Limited.
Commenting on the outlook for FY 2008, Mr Alan Chan, Chief Executive Officer of SPH said: “Outlook for the Group’s print advertisement revenue is positive given the generally healthy economic environment. Property segment will be boosted by profits recognised for Sky@eleven over the life of the project. The Group remains committed to sustaining the core newspaper business’ margin and will continue to invest in new media platforms as part of its growth strategy. Barring unforeseen circumstances, the Directors expect the recurring earnings for the current financial year to be satisfactory.”
The Directors of SPH have proposed a Final Dividend of 19 cents per share, comprising a Normal Dividend of 9 cents per share and a Special Dividend of 10 cents per share in respect of the financial year ended 31 August 2007. These dividends are on tax-exempt (one-tier) basis and will be paid on 27 December 2007. Together with the Interim Dividend paid during the year, total Dividend payout for FY 2007 will be 26 cents.
TELCOs – BT
Buy M1, SingTel, StarHub for their safe-haven status: Citi
All 3 outperformed the stock market in last 3 corrections
BUY the three listed telcos for their safe-haven status, given that markets are at all time highs, said Citi in a report this week.
It noted that the telcos outperformed the stock market in the last three corrections earlier this year, in 2006 and 2004, a point Citi had highlighted last month.
‘This track record should encourage ownership of all three Singapore telecom stocks, given that the markets are at all time highs,’ it said.
As domestic consumption stories, the telcos are largely insulated from the risk of a global economic slowdown, Citi had said in a September report on Asian telcos.
‘It’s all about relative outperformance though. No one single telco has delivered a positive return over the last three corrections (StarHub comes close),’ it said.
In the 2004 market correction, M1 outperformed the Straits Times Index (STI) 5.6 per cent while SingTel was 0.2 per cent higher.
StarHub was only listed in October 2004.
During last year’s correction, M1 outperformed 7.6 per cent, SingTel 0.4 per cent and StarHub 13.3 per cent.
During this year’s correction, the outperformance of M1, SingTel and StarHub was 10.9 per cent, 0.3 per cent and 5.9 per cent respectively.
In the latest report, Citi said the Singapore telcos are benefiting from the immigration-driven consumption growth and robust economic activity.
Yesterday, the government said preliminary third-quarter growth was 9.4 per cent. Economists are expecting full-year growth to exceed the official 7-8 per cent forecast.
Last month, government data showed that Singapore’s total population rose 4.4 per cent in 2007 to 4.7 million, boosted by foreigners.
The non-resident population grew about 14.9 per cent in 2007 to cross one million. Non-residents accounted for about 130,000 or 66 per cent of the total population increase.
The resident population grew 1.8 per cent in 2007 and in absolute terms, it was 66,600 from a year ago.
Citi’s economist Chua Hak Bin said: ‘The proportion gives a sense of distribution of current job growth, with about two-thirds of jobs going to non-residents.’
Job growth has been strong with total employment at 2.61 million at end-June 2007, up from 2.5 million at end-2006 and 2.32 million at end-2005.
Job growth was about 113,800 in the first half of this year. Manpower Minister Ng Eng Hen said a record 200,000 jobs at least will be reached this year.
The telcos focus much of their marketing, particularly pre-paid mobile services, on the foreign worker segment.
Citi has revised upwards its price target for SingTel to $4.40 from $3.90.
It likes SingTel for three reasons – its stakes in regional telcos, especially India’s Bharti, solid domestic earnings momentum and capital management efforts.
As for StarHub, the telco has the best exposure to Singapore’s vigorous growth, Citi said, also giving a new target price of $3.60 from $3.30.
M1 has been upgraded to ‘buy’ from ‘hold’. Citi said while M1 is structurally the weakest of the three operators, its good yield offsets lower growth prospect. Citi cites a 11 per cent prospective yield and noted that an interested buyer in Keppel has increased its holdings to 19.9 per cent versus 18.2 per cent in June.
ComfortDelgro – OCBC
Attempting a breakout
– ComfortDelgro is attempting to stage a breakout of its descending trend channel, after approximately 5-weeks of sideways trading.
– However the breakout we observed lacked strong volume, thus we could witness a brief pull back in an attempt to test the support of the shortterm uptrend line before ComfortDelgro reattempts a rebound.
– We observed the RSI has hovered below the mid-range for sometime hence a sustained move above the mid-range would signal a return of confidence and could very likely push Comfort towards its resistance level at S$2.14.
– We also observed that the RSI has broken above its downtrend line hence any pull back in the near-term would be mild.
– Support set at S$1.80.