Stable Dividends at Kingsmen Creatives For 2013

Communication design and production group Kingsmen Creatives Limited (SGX: 5MZ) released its full-year earnings yesterday evening and clocked in a revenue increase of 2.1% year-on-year to S$296.3 million for the whole of 2013. Meanwhile, its net profit grew 8.9% to S$18.4 million, with its diluted earnings per share (EPS) rising correspondingly by 8.3% to 9.57 Singapore cents.

Kingsmen has four business divisions: Exhibitions & Museums; Retail & Corporate Interiors; Research & Design; and Alternative Marketing. Its long-standing clients include locally-listed companies such as DBS (SGX: D05), FJ Benjamin (SGX: F10) and Wing Tai (SGX: W05).

The Exhibitions and Museums division recorded revenue of S$103.5 million, a decrease of 4.9% over the previous year. This was primarily attributed to the completion of fewer large scale projects for the year. Projects completed during the year include the F1 Singapore Grand Prix, the Fern Garden revamp at Changi Airport Terminal 2 and Hong Kong Disney Mystic Point.

Strong revenue contribution from key customers and brand names such as Robinsons, Dickson Group and Abercrombie & Fitch allowed the revenue at the Retail and Corporate Interiors division to see a 5.1% increase to S$166.6 million.

Meanwhile, the Research and Design division’s revenue increased by 11.6% to S$11.4 million due to the completion of design services for customers and brand names such as Abercrombie & Fitch, Burberry and Lotte Group.

The Alternative Marketing division was the best performer for the year as its revenue surged 17.5% to S$14.8million, mainly due to a Chanel Event at Loewen Cluster in Singapore.

As of 30 December 2013, the firm had a total cash hoard of S$63.7 million while total debt stood at S$4.6 million. That’s an improvement in Kingsmen Creative’s balance sheet as its cash holdings and total debt load was at S$53.1 million and S$4.6 million respectively at the end of 2012.

In 2013, the company generated S$22.9 million in cash flow from operations, a decrease of some 24.5% from a year ago. S$4.6 million had been spent on capital expenditures, translating to a free cash flow of around S$18 million.

The firm has declared a final dividend of S$0.025 per share, bringing total dividends for 2013 to S$0.04 per share, unchanged from 2012.

Mr Benedict Soh, Executive Chairman of Kingsmen Creatives, commented on the year’s results:, “We have done well in 2013. More importantly, demand for our services is strong and we are confident that this will continue, given the many projects and developments that have been planned in the region over the next few years. As we continue to enhance our capabilities in human resource and back-end support infrastructure, we are also taking this opportunity to explore other synergistic areas that can bring value to our clients. These actions will enable us to be in a strong position to serve our growing global client base for years to come.”

The shares last changed hands at S$0.96 on Thursday. This translates to a historical PE ratio of 10 and a dividend yield of 4%, based on the company’s latest results.

Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.  

Like us on Facebook  to keep up-to-date with our latest news and articles. The Motley Fool’s purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P owns shares in Kingsmen Creatives Limited.