Vicom Limited’s Annual General Meeting: 5 Quick Things Investors Should Know

From time to time, Foolish hats turn up at annual general meetings (AGM).

As a shareholder of Vicom Limited  (SGX: V01), I made the trip down for its AGM held yesterday. Vicom is a leading provider of technical testing and inspection services with operations primarily in Singapore. You can catch the company’s fourth-quarter earnings report here.

Without further ado, here are five quick things I learnt from the AGM:

  1. In its annual report, Vicom noted that its SETSCO segment was impacted by the downturn in the offshore and marine sector. One shareholder asked for more details around this. Sim Wing Yew, Vicom’s chief executive, said that the offshore and marine piece makes up 20% of SETSCO’s business. SETSCO’s top-line fell 5% from the previous year.
  2. Sim added that the SETSCO piece was approximately two-thirds of its sales with the other one-third coming from the vehicle inspection segment. The SETSCO segment was also more competitive, Sim added. Lim Jit Poh, Vicom’s chairman, declined to reveal Vicom’s profit-split between SETSCO and its vehicle inspection unit for competitive reasons.
  3. A feisty debate occurred over the threat of electric cars. Lim felt that it was not possible for Vicom to forecast what government policies on the matter would look like in the future. Kua Hong Pak, Vicom’s deputy chairman, added that any change to electric cars usage will likely occur in phases and Vicom’s revenue will not “fall off a cliff.” Kua went on to cite the case of the Tesla owner in Singapore who had faced hurdles in trying to bring the vehicle into the country and use it here. Kua added that Vicom did the test for the Tesla case, showing that Vicom has the capability to test electric cars. Sim added that Vicom does a range of tests and that the current electric car population in Singapore are subject to tests.
  4. Questions were also raised on the sustainability of Vicom’s dividend. Lim said that it is not possible to forecast the current year’s dividend. He said that Vicom will pay out a dividend of at least 50% of its profit for the year.
  5. Finally, one shareholder enquired about the cash on Vicom’s balance sheet. For context, Vicom ended 2015 with S$100 million in cash on hand, and that’s nearly 57% of its total assets of S$177 million. The shareholder felt that Vicom could do better than just fixed deposits. Lim responded by saying that it was the board’s responsibility to keep shareholder monies safe. He added that the fixed deposit “gives a comfortable sleep at night.”

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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 Chin Hui Leong owns shares in Vicom.