Singapore’s Big Winner for the Week: Koh Brothers Group Ltd

Koh Brothers Group Ltd (SGX: K75) has gone up by 3.3% since last Friday to end Wednesday at S$0.315.

During the same period, the local share market, as represented by the Straits Times Index  (SGX: ^STI), only inched up by 0.3%. This makes Koh Brothers one of the big winners in Singapore for the week.

On 17 February 2015, Koh Brothers, which has fingers in construction, property development, and specialist engineering solutions, announced its financial results for the year ended 31 December 2014 (FY 2014).

The firm books revenues in three different business segments, namely, Real Estate, Leisure and Hospitality, and Construction and Building Materials.

Total revenue increased 10% year-on-year to S$395.1 million mainly due to higher sales obtained from the Real Estate division. Gross profit grew by 37% to S$62.3 million due to a spike in the gross profit margin from 12.6% a year ago to 15.8%.

Koh Brothers’ net profit for FY 2014 had an even better performance as it surged by 38% to S$29.5 million mainly due to a 538% jump in other income to S$8.2 million. The huge increase in other income was largely attributable to profits from the sale of a subsidiary and fair value gains on investment properties.

Mr. Francis Koh, Managing Director and Group Chief Executive Officer of the company, shed some light on why Koh Brothers performed well in FY 2014 and what the firm intends to do going forward:

 “In Real Estate, the success of Parc Olympia’s sales will continue to provide us with good earnings visibility. As a themed-and-lifestyle developer, we are always looking out for new features to differentiate our residential properties to appeal to all homebuyers. In challenging times, we will place an even greater emphasis on unique or innovative features to differentiate our developments.

At the same time, we will look at increasing our recurring income from our Property Investments which include commercial and residential properties, as well as from our Leisure and Hospitality segment. In Singapore, we are in the midst of a makeover of our JV mall, Sun Plaza, at Sembawang and we will provide more updates at the appropriate time. For Hospitality, we will continue to look at asset enhancements for both Oxford Hotel and our serviced apartments, Alocassia, for future growth.”

To reward shareholders, Koh Brothers is doling out a dividend of 0.8 Singapore cents per share for the whole of 2014 (consisting of a final and special dividend of 0.5 cents and 0.3 cents respectively). In 2013, the firm gave out a total of 0.7 Singapore cents per share in dividends.

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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.