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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.

Despite the poor earnings, Kingsmen Creatives still has a net cash position of $44.5 million.

1H 2017 1H 2016 Change
Revenue S$145.0m S$149.4m (2.9%)
Gross profit S$35.3m S$34.3m 3.0%
Net profit S$2.7m S$2.3m 19.4%
EPS 1.38 cents 1.17 cents 17.9%

It is also interesting to know that Kingsmen Creatives is exploring new opportunities by incorporating two new entities.

Kingsmen Ventures

Kingsmen Ventures looks at strategic acquisitions and partnerships. This is similar to the strategy ISOTeam has deployed “Expansion through strategic partnerships” which I wrote about here ( My Personal Analysis of ISOTeam ).

Kingsmen Xperience

Kingsmen Xperience focus is on the USA market and will pursue opportunities to create and own media/entertainment themed licenses. Via Kingsmen Ventures, Kingsmen shareholding is 80% while the partnering company, Atelesford International, shareholding is 20%. The total paid up capital is 100,000 USD.

I tried searching up for “Atelesford International”, however there was a lack of information on the profile of this company.

My Thoughts

Currently, Kingsmen Creatives make up 4% of my stock portfolio. They have maintained their interim dividend of 1 cents. Venturing into overseas market seems like a good thing to grow a company. However, like I mentioned above, there is a lack of information on “Atelesford International”. It will boost my confidence in Kingsmen Creatives if I know what “Atelesford International” does in the USA.

Although the stock price of Kingsmen Creatives looks depressed now at S$0.61, I will not be adding more of it to my stock portfolio. The company seems to be going through a period of changes in terms of its management, businesses and its location.

We have to wait for changes to settle before looking further if Kingsmen Creatives is able to regain its shine in the earlier days.

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