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Highlights of Vicom’s First Quarter Results

vicom logoVicom Limited (SGX: V01) released its first quarter results on Thursday. It is the largest technical testing and vehicle inspection company in Singapore and is more than 60% owned by land transport company, ComfortDelGro Corporation (SGX: C52).

On top of providing vehicle inspection services, it provides other testing and inspection services under its SETSCO subsidiary, such as “testing, calibration, inspection, consultancy and training services to the aerospace, marine and offshore, biotechnology, oil and petrochemical, building construction and electronics manufacturing industries. Its services include quality assurance testing and evaluation of building materials, structural and chemical analysis, food and microbiological analysis, environmental monitoring, amongst others.”

For the quarter, revenue rose 3.3% year-on-year to $26.9 million on the back of higher business volume. Net profit was at S$8 million, $0.6 million or 7.4% higher than last year.

As of 31March 2014, the firm had a clean balance sheet with a cash balance of S$85 million and no debt. End of last year, the cash balance was at S$78.5 million.

It generated cash flow from operations of S$7.8 million for the quarter, up from S$6.9 million last year.

Going forward, Vicom said that the demand for the vehicle testing services is expected to moderate as more vehicles are expected to be deregistered in the year. The non-vehicle testing business is expected to grow in spite of keen competition.

Over the years, the firm has been a consistent dividend grower. From 2008 to 2013, total dividends have grown from 9.25 Singapore cents per share to 22.5 Singapore cents per share, giving a compounded annual growth rate of 19.5%.

Vicom shares closed at S$5.83, valuing it at a historical PE ratio of 18. It has a dividend yield of 2.8%.

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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 Sudhan P doesn’t own shares in any companies mentioned.