Boustead Full Year Results: Record Profit

Ser Jing - Boustead Full Year Results (pic)Boustead Singapore (SGX: F9D) reported its full year results today. The headline numbers showed a 46% increase in full year profit to S$81.4m over the prior year’s S$55.6m. The company’s earnings this year was a new record but it was padded by non-operating items related to income taxes and sale of investments that totalled S$14.5m. If these were stripped away, net profit would have only been 20% higher than last year’s S$55.6m.

Meanwhile, annual revenue for the company was also up by an impressive 26% from S$408.7m a year ago to S$513.2m.

The company contains four main operating divisions; Real Estate Solutions; Geo-Spatial Technology; Energy-Related Engineering; and Waste & Wastewater Engineering. We shall take a closer look at how each division fared.

Starting with the best performer, Real Estate Solutions booked S$251.8m in revenue for the year, outclassing last year’s figure of S$134.1m by 88%. The growth in top-line, mainly due to recognition of revenue from its order backlog of design-and-build projects, delivered pre-tax profits of S$61.2m that more than doubled the previous year’s S$29.3m.

The Geo-Spatial Technology division, which provides digital geographic mapping services, is up next with a 6% annual growth in revenue from S$108.2m a year ago to S$114.4m. The division, a superbly consistent performer with 11th consecutive years of revenue growth, had experienced strong demand for its technology in Australia during the year which helped boost sales. Along the way, it delivered an increase in pre-tax profit to S$29.7m, up 10% from S$26.9m last year.

Now, we turn our attention to the laggards starting with the Energy-Related Engineering division. Revenue for it had slipped by 3% from S$125.7 a year ago to S$122m but it managed to post a slightly higher pre-tax profit of S$13.7m, an increase of 2% over last year’s S$13.4m. The division had endured a slow start for the financial year ended 31 March 2013 but saw business activity from the oil-and-gas businesses pick up in the second half of the year.

The Waste & Wastewater Engineering endured a difficult year as it brought in S$25m in sales for the year, which was more than a third lower than last year’s S$40.1m. This division is a relatively small aspect of the company’s overall business activity, accounting for only 5% of revenue and 1.5% (S$1.5m) of total pre-tax profit of S$97.4m for the recently completed financial year. In any case, a slow-down in the number of projects being implemented accounted for the division’s top-line drop.

Boustead’s Chairman and Chief Executive Officer, Mr Wong Fong Fui commented on the year’s results, “FY2013 has been an excellent year for Boustead with the net profit reaching new heights. We have moved into the new year with a healthy order book backlog of S$378 million and are armed with a net cash position of S$189 million, which will be used to enlarge the industrial leasehold portfolio and pursue acquisitions and investments.”

He also added that the company sees mixed prospects for all four of its operating divisions for the new financial year. But the company does “expect conditions in the industrial real estate market to be challenging but this will be slightly compensated for by bright spots in the oil & gas market. In addition, the Geo-Spatial Technology Division should produce another year of predictable and steady growth. The Group is also continuing to seek new business opportunities and has recently made an initial investment in the renewable energy sector in Japan.”

Shareholders will be pleased to know that the company has declared a Final and Special dividend per share of S$0.03 and S$0.02 respectively. This will bump up full-year dividends to S$0.07 per share, a 40% increase from last year’s pay out of S$0.05.

Boustead’s shares are currently trading at S$1.52 with a dividend yield of 4.6% and Price-Earnings ratio of 9.4.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chong Ser Jing doesn’t own shares in any companies mentioned.