ISOTeam offers services related to building maintenance and estate upgrading industry. ISOTeam’s major customers include town councils, government bodies as well as private sector building owners.
The range of services ISOTeam offers are
- Upgrade and Retrofit Works
- Repairs and Decoration Works
- Reroofing and Waterproofing Works
- Facade Restoration and Cleaning Works
- Home Painting Services
- ISO Pest Management
- Access Rental Services
ISOTeam has a total of 234 employees and 493 general workers. Mr David Ng Cheng Lian is current Chairman and the founder of ISOTeam. Mr Anthony Koh Thong Huat is one of the co-founder and current CEO for the group. Both of them currently holds 2.70% direct interest in the shares and 41.14% deemed interest in the shares of the company. Both of them have more than 30 years of experience in the building maintenance and estate upgrading industry.
As of 31st December 2016, the total number of shares stands at 281,122,956. At the closing price of S$0.38, the market capitalization is estimated at $106 million. Thus ISOTeam is classified as a small cap stock.
Revenue and Gross Profit
Revenue and Gross Profit has been increasing from FY12 to FY16.
Return On Equity
Although, return on shareholders equity (ROE) has been declining, it remains above 15%.
Return on equity (ROE) is a measure of profitability that calculates how many dollars of profit a company generates with each dollar of shareholders’ equity.
The formula for ROE is: ROE = Net Income/Shareholders’ Equity. ROE is sometimes called “return on net worth. – InvestingAnswers”
Cash flow has been improving except for a slight drop from FY2015 to FY2016. Earnings are expected to be lumpy for companies such as ISOTeam whereby they engage in project based work.
|Net cash generated from operating activities||(211)||6,747||17,063||15,607|
|Total dividend (cents)||1||1||1.15||0.75|
|Earnings per share (cents)||5.11||5.19||6.45||3.23|
|Dividend payout ratio (%)||19.57||19.27||17.83||23.33|
Strength and Catalyst
1. Expansion into Myanmar
2. Expansion into Solar Energy Market
3. Expansion through Strategic Partnerships
1. Labour Intensive Nature
2. Over-reliance on few major customers
3. Lumpy Earnings
- Not a dividend stock
- Unpredictable earnings by the nature of its business
- Cannot tell if it is a growth stock. Looking at the financials, the ROE has been declining although revenue and gross profit are growing. Value investors can claim that ISOTeam is preserving capital to grow the company but at the moment, I cannot tell whether ISOTeam is concern about returning the value back to shareholders.
I agree, no clear sight forward and it is over price. I think centurion or cogent is a better choice. Take a look.