Category: SPH
SPH – CIMB
Taking flight with adex growth
• Above expectations. This was a strong set of results with FY07 S$506m (+40% yoy) core earnings beating our estimate by 20% and consensus’s by 9%. Key reasons for the surprise were higher investment income (+79% yoy) and a lower tax rate due to adjustments for overprovision. A final DPS of 19cts was announced, bringing full-year DPS to 26cts, ahead of our 25ct expectation.
• FY07 operating revenue jumped 13.6% yoy to S$1.2bn. Core print media revenue grew 5.8% yoy to S$959m in FY07, underpinned by strength in classifieds (S$277m, +9% yoy) and display (S$395m, +6% yoy). Printed ad revenue growth accelerated in 2H07 (+11% yoy vs. 1H07’s 3.5% yoy) on the back of a robust domestic economy. Property revenue grew 80% yoy with the help of Sky@eleven’s maiden contribution of S$71.3m (slightly higher than our estimated 10% revenue recognition for FY07) and Paragon’s S$7.8m revenue growth.
• Operating margins climbed to 37% (+200bp yoy) on higher contributions from the property segment. Core media operating margins remained stable at 35% as strong topline growth and flattish newsprint costs offset a 12.5% yoy rise in staff costs. Newsprint cost benefited from a weaker US$ and lower newsprint prices. Staff costs were higher on headcount growth and higher variable bonuses.
• Raising earnings estimates on positive outlook. Print adex growth is firmly picking up on the back of Singapore’s economic growth. SPH is also benefiting from Sky@eleven contributions and robust rental growth at Paragon. This prompts us to raise our earnings estimates by 9-19% for FY08-09. We also introduce FY10 estimates. DPS estimates have been raised by 3-14% for FY08-09.
• Reiterate Outperform, albeit with reduced target price of S$5.10 (S$5.22 previously). Our sum-of-the-parts valuation has been reduced slightly as we switch our valuation methodology for core media operations to DCF (WACC 7.5%, terminal growth 1%) from 16x CY07 P/E. As a laggard consumer stock profiting from Singapore’s economic upcycle, we believe SPH is poised to deliver strong earnings growth over the next few quarters. We like it as the best-in-class proxy for adex growth in Singapore and yields of 6-8% for FY08-10.
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.
SPH – SGX
The Board of Directors of Eastern Holdings Ltd. (the “Company”) wishes to announce that its subsidiary Eastern Directories Pte Ltd (“EDPL”) has signed a non-binding Letter Of Intent (“LOI”) with Singapore Press Holdings Limited (“SPH”) to dispose of selected media assets.
EDPL plans to divest the following four events and related assets:
1. the IT Show;
2. the Computer Exhibition (“COMEX”);
3. the Food and Beverage Fair; and
4. the World Food Fair.
The above transaction is subject to satisfactory due diligence by SPH, negotiation of final terms and approval from the shareholders of the Company at an Extraordinary General Meeting which will be convened after the signing if successful of the Sales & Purchase Agreement.
Source : SGX