Goodbye Kingsmen Creatives

Kingsmen Creatives makes up 3% of my stock portfolio. I have divested all my holdings of Kingsmen Creatives at a loss. As you can see below, even though revenue improved by 1.4% to S$365.9m in FY2019, gross profit fell 5.8% and net profit fell 93.6%. Gross Profit is revenue minus the cost of goods sold. Net Profit is the revenue after deducting all the operating, interest and tax expenses. As we can see, majority of the profit was wiped off by the increase in expenses.

Here are the expenses incurred by Kingsmen Creatives.

  • Higher depreciation charge on property, plant and equipment due to depreciation charge incurred on the new headquarter building.
  • Increase in employee benefit expenses from new experimental attractions business.
  • Foreign exchange losses.
  • Higher amount of loans and borrowings outstanding in FY2019 compared to FY2018.
Gross ProfitS$77.2mS$82.0m(5.8%)
Net ProfitS$0.5mS$8.1m(93.6%)
EPS0.26 cents4.09 cents(93.6%)

Moving ahead, even though Kingsmen has secured contracts worth of S$140 million, what triggers me to sell off Kingsmen was that no dividend was declared. It was mentioned that the company wishes to retain cash for its operations.

The sudden COVID-19 outbreak heightened risk alerts that have significantly limited travel and human interaction and this led to a decline in business activities. Exhibition, events and experimental attractions have been impacted and some projects have been rescheduled to the later part of the year.

Goodbye Kingsmen Creatives.

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