When it comes to long-term market beating stocks, Vicom Limited (SGX: V01), which is majority-owned by land transport giant ComfortDelGro Corporation Ltd (SGX: C52), would belong in the list. Over the past five and 10 years, Vicom’s share price has gained 67% and 438%, respectively. The gains from the Straits Times Index (SGX: ^STI), Singapore’s market barometer, have been -1% and 13%. I thought it’d be useful to condense some of Vicom’s business facts into a simple fact sheet that investors can use as a starting point for further research. So, here goes. The business of Vicom Vicom no longer…
Over the past five and 10 years, Vicom’s share price has gained 67% and 438%, respectively. The gains from the Straits Times Index (SGX: ^STI), Singapore’s market barometer, have been -1% and 13%.
I thought it’d be useful to condense some of Vicom’s business facts into a simple fact sheet that investors can use as a starting point for further research. So, here goes.
The business of Vicom
Vicom no longer segments its business in its financial reports, but investors can think of the company has having two main segments: Vehicle and Non-Vehicle.
The vehicle business provides services such as vehicle inspections, vehicle assessments, vehicle evaluation, emission tests, and others such as insurance and road tax renewal. This part of the business is conducted in the company’s VICOM-branded and JIC-branded inspection centres. In 2015 alone, Vicom inspected a total of 522,140 vehicles, “a slight increase” over 2014.
Vicom’s non-vehicle inspection and testing services arm falls under SETSCO.
SETSCO provides testing, calibration, inspection, consultancy and training services to a wide variety of industries such as aerospace, marine and offshore, biotechnology, oil and petrochemical, building construction, and electronics manufacturing industries.
Example of services provided by SETSCO in 2015 included glass inspection projects at the Flame Towers in Baku, Azerbaijan and the Four Seasons Hotel in Abu Dhabi, United Arab Emirates.
2011 was the last year in which Vicom provided segmental results. Back then, the vehicle business accounted for 39% of total revenue of S$90.7 million. The non-vehicle business took up the remaining 61% share. The split is reversed when it comes to operating profit; the vehicle business has a 64.7% share with the rest going to the non-vehicle business.
No fact sheet is complete without some key financial information. So, let’s look at some numbers for the company over the past five years.
Source: Vicom 2015 annual report
Some noteworthy elements in the table above include:
- Steady growth in revenue, operating profit, and earnings per share
- Consistent increases in dividend per share
- A high return on equity that has come in above 20% (although there has been a steady decline)
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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 Lawrence Nga doesn’t own shares in any companies mentioned.