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Metro Holdings Limited Full Year Results Boosted By One-Off Gains

Metro Holdings Limited (SGX: M01) announced its full year result this week. The retail operator and property developer had an interesting year with a new store opening, asset write-downs, and an increased investment in its new associated company, Top Spring International Holdings Limited. Here are the highlights.

Metro Holdings Limited saw its revenue increased 4.78% year on year to S$145.8 million in FY2015 ending 31st March 2015. This was mainly due to the opening of Metro Centrepoint in Q3 of FY2015. However, with much higher operating expenses and an impairment of S$8.8 million on its property, plant and equipment, the company fell into an operating losses for the year.

Metro Holdings Limited has largely transformed into an investment holding company, and despite its retail business seeing operational losses this year, the overall impact on the whole company was relatively small. The company ended the year with a net profit attributable to its owners of S$142.9 million, up 33.7% year on year.

The main increase came from its share of associates’ results which are mostly one-off gains for the company. Metro Holdings recorded a negative goodwill of S$57.4 million after it started accounting its stake in Top Spring International Holdings as an associate from an “available-for-sale” investment. There was also a fair value gain of S$16.1 million from its associates’ investment properties. On top of that, the company also enjoyed a divestment gain of S$27.0 million from its disposal of its 10.7% stake in six Tesco Lifespace developments in China. These gains accounted for most of its net increase in net profit for this year.

In terms of balance sheet, the company is in a very strong position. It is currently sitting on a net cash position of more than S$369.0 million. For the full year, Metro Holdings declared a dividend of 6.0 cents per share, the same as FY2014.

Foolish Summary

Looking forward, the company believed that its rental income should continue to be stable. Its development business in China is expected to still be positive to the group in FY2016. As for Singapore, due to the much weaker property market, sales in its “The Crest” project has been impacted. Lastly, for its retail business, the company is planning to close down Metro Sengkang after its lease expires and sales from Metro Centrepoint would be impacted when The Centrepoint is scheduled for renovation in May 2015.

Metro Holdings Limited is currently trading at a price to tangible book value of 0.6 times and offers a dividend yield of about 5.7%.

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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 writer Stanley Lim doesn't own shares in any companies mentioned.