Kingsmen Creatives Maintain Interim Dividend of 1 Cents for 1H 2019

On 8th August 2019, Kingsmen Creatives Ltd has released their 1H2019 financial results. Even though Kingsmen Creatives have reported an increase of 17.7% in revenue to S$172.8m, net profit fell a whopping 39.9%. Earnings per share fell 40.5% to 0.88 cents.

The increase in revenue was mainly due to the contribution from several key events and projects in 1H 2019. However, the profit was eroded by higher operating expenses and employee benefit expenses incurred due to higher cost resulting from increased headcount from the new experiential attractions business and increased average wage. If you have followed Kingsmen Creatives closely, you would have known that they have invested in NERF and the world’s first NERF Action Xperience centre is opening in Singapore in the fourth quarter of 2019 at Marina Square.

The cash flow is still healthy as Kingmen Creatives cash and cash equivalents stood at S$67.7 million as at 30 June 2019 and I certainly hope they keep it that way.

1H2019 Financial Results

1H 2019 1H 2018 Change
Revenue S$172.8m S$146.8m 17.7%
Gross profit S$38.8m S$35.7m 8.6%
Net profit S$1.8m S$3.0m (39.9)%
Earnings Per Share (EPS) 0.88 cents 1.48 cents (40.5)%

Kingsmen Creatives is made up of four business divisions. They are the Exhibitions and Thematic division, Retail & Corporate Interiors division, Research & Design division and Alternative Marketing division. Below is a brief summary of revenue from each division.

  • The Exhibitions and Thematic division registered a revenue of S$83.2 million in 1H 2019, an increase of S$18.1 million or 27.8% from S$65.1 million in 1H 2018.
  • The Retail & Corporate Interiors division recorded a revenue of S$79.3 million in 1H 2019, an increase of S$9.4 million or 13.4% compared to S$69.9 million in 1H 2018.
  • The Research & Design division achieved a revenue of S$8.1 million in 1H 2019, an increase of S$0.8 million or 10.8% from S$7.3 million in 1H 2018.
  • The Alternative Marketing division registered a revenue of S$2.3 million in 1H 2019, a decrease of S$2.2 million or 49.0% compared to S$4.5 million in 1H 2018.

My personal opinion is that it is still early to tell if Kingsmen Creatives investment into NERF will take off. From the current closing share price of S$0.51, we can tell that investors are still not confident about the NERF investment.

Last but not least, I am glad that Kingsmen Creatives did not cut its dividend. An interim dividend of 1.0 cents was declared which was the same as last year. Based on the historical dividend payout of S$0.025 cents and current share price of S$0.51, the current dividend yield is 4.90%.

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