Ho Bee Land Ltd’s Latest Earnings: Huge Growth Delivered

Ho Bee Land Ltd (SGX: H13) released its fiscal first-quarter results (for the three months ended 31 March 2015) yesterday evening.

Founded in 1987, Ho Bee Land is a real estate development and investment company which focuses on residential and commercial projects in Singapore, Australia, China, and the United Kingdom.

Financial highlights

For the fiscal first-quarter, Ho Bee Land’s revenue had surged by 80.7% year over year to S$31.6 million, driven mainly by the increase in rental income of office buildings, The Metropolis in Singapore and 1 St Martin’s Le Grand in London.

The top-line growth had made its way to the bottom-line with Ho Bee Land posting a 182% spike in quarterly profit from S$4.1 million a year ago to S$11.6 million. Consequently, earnings per share (EPS) also rose from 0.6 cents to 1.7 cents.

On the cash flow front, Ho Bee Land ended the fiscal first-quarter with operating cash flow of S$5.9 million, down from the figure of S$13.3 million seen a year ago.

Investors might want to note that Ho Bee Land’s balance sheet has weakened compared to a year ago. As at 31 March 2015, the property developer had S$10.1 million in cash and S$913 million in total borrowings; the figures were S$27 million and S$752 million, respectively, a year ago. In addition, the net gearing ratio had also inched up from 0.31 at end-March 2014 to 0.34 at end-March 2015.

Investors might also want to note changes in Ho Bee Land’s book value given that the company has been growing its investment property portfolio over the past few years. On that front, Ho Bee Land ended March 2015 with a book value per share of S$3.93, up 13% from S$3.47 a year ago.

Business highlights and outlook

Chua Thian Poh, Chairman & CEO of Ho Bee Land, had given some comments about Ho Bee Land’s outlook in the earnings release:

“The residential market in Singapore continues to be challenging. However, earnings for the next few quarters will continue to be underpinned by the strong rental income from the office buildings, The Metropolis in Singapore, Rose Court, 1 St Martin’s Le Grand and 60 St Martin’s Lane in London.”

Based on its current share price of S$2.30, Ho Bee Land is trading at 0.6 times its latest book value and sports a dividend yield of 2.2% (based on its annual dividend of S$0.05 per share in 2014).

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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 James Yeo doesn’t own shares in any companies mentioned.