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8 Takeaways From VICOM Limited’s 2018 First-Quarter Results

VICOM Limited (SGX: V01) is Singapore’s leading provider in technical testing and inspection services. On Wednesday, the company released its financial results for the first quarter of the year. Here are the eight takeaways from its earnings update:

1. Revenue increased 1.6% year-on-year to S$24.5 million. Operating costs increased at a slower pace of 0.7% from the previous year to S$16.3 million.

2. Consequently, operating profit increased 3.5% to S$8.2 million from S$7.9 million a year ago. Profit attributable to shareholders of the company rose 2.3% to S$7.0 million.

3. Earnings per share, likewise, increased to 7.9 Singapore cents from 7.73 in the corresponding quarter last year. This translates to an annualised earnings per share of 31.6 Singapore cents.

4. As of 31 March 2018, the total value of its assets rose S$6 million or 3.3% from the previous quarter to S$185 million. This was largely due to a S$5.5 million increase in cash.

5. The group also had liabilities of S$29.6 million. As such, net asset value per share came in at S$1.753. This was 4.7% higher than the end of the previous quarter. The company had no debt and a strong net cash position of S$113.1 million.

6. Over the quarter, the company raked in S$6.15 million from operations and spent S$331,000 in capital expenditure. This equates to S$5.82 million in free cash flow generated for the quarter.

7. Regarding the outlook for the rest of the year, the group’s management said:

“ The vehicle testing business is expected to improve and the non-vehicle business is expected to remain stable. The recent announcement by the National Environment Agency to incentivise de-registration of older motorcycles over the next five years is not expected to have a material impact on the vehicle inspection business.”

8. At the time of writing, shares of VICOM Ltd traded at S$6.06 per share. This translates to a price-to-earnings ratio of 19.1 and a trailing dividend yield of 5.9%.

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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 Jeremy Chia own shares in VICOM Ltd.