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Kingsmen Creatives Undergoing a Period of Changes

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Kingsmen Creatives announced a net profit increase of 19.4% from the previous corresponding period (“1H 2016”).

Both the Retail & Corporate Interiors division and Alternative Marketing division reported revenue increases. This shows that there is slight recovery of the luxury industry as luxury brands starts advertising and decorating their stores to attract customers.

The Exhibitions and Thematic division and Research & Design division reported revenue decreases. This can be due to less exhibitions and events being held in the Asia pacific and Middle East region.

Based on my previous post ( Can Kingsmen Creatives Still Hold the Fort? ) the bulk of Kingsmen Creatives revenue comes from the Retail & Corporate Interiors division and the Exhibitions and Thematic division. If both the divisions reported revenue decreases, this will have a negative impact on Kingsmen Creatives. Fortunately, in 1H 2017, the decline in earnings from the Exhibitions and Thematic division is complemented by earnings increase from the Retail & Corporate Interiors division. Read More

Kingsmen Creatives Turning Around in 1Q2017

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Kingsmen Creatives have just released their 1Q2017 results.

  • Kingsmen Creatives recorded a revenue of S$66.2 million in first quarter of 2017 which is an increase of S$4.7 million or 7.7% compared to S$61.5 million in 1Q 2016.
  • Gross profit in 1Q 2017 increased by S$2.2 million or 16.2% to S$15.6 million compared to S$13.4 million in 1Q 2016. The increase was a result of higher revenue and gross profit margin recorded. Gross profit margin was higher at 23.5% in 1Q 2017 compared to 21.8% in 1Q 2016.
  • Cash and cash equivalent decreased to S$58.5 million. In my previous post, I mentioned they have cash and cash equivalent of S$74.6 million. I feel that there is nothing to worry about as Kingsmen Creatives have an increase in working capital requirements of S$12.6 million and they are still cash rich.

Read More

Can Kingsmen Creatives Still Hold the Fort?

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Recently, I have noticed Kingsmen Creatives share price starts to shaken, fluctuating from $0.63 to $0.595. Below are some of the notes I have taken from reading the FY2016 annual report.

Based on the financials, we can see why investors are selling or avoiding Kingsmen Creatives at this moment. There are more negative news than positive news. I have also color coded the points I think are negative in red and positive in green.

  • Kingsmen Creatives achieved a revenue of $329.7 million in 2016 as compared to $327.9 million in 2015. Net profit decreased by 9.7%.
  • Earnings per share fell by 38% from 9.71 cents in FY2015 to 6.02 cents in FY2016.
  • Annual dividends fell from 3 cents in FY2015 to 2.5 cents in FY2016. Current dividend yield is 4.2% if we based on the closing price of $0.595.
  • Kingsmen Creatives has cash and cash equivalent of 74.6 million. Kingsmen Creatives is still in strong cash position. This is a positive news as it will help the company ride through the economic downturn.
  • The new Kingsmen Creatives headquarter in Changi Business Park will be ready by second half of 2018. The tenure of the land is 30 years, expiring on 30th November 2045.
  • Main bulk of Kingsmen Creatives revenue is contributed by Exhibitions and Thematic division 45.9% and Retail and Corporate Interiors division 45.6%.

  • Operating expenses was higher for FY2016 as compared to FY2015 due to higher depreciation charge incurred on property, plant and equipment as a result of the acquisition of plant and equipment in FY2016 to support the operations of the Group.

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