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7 Highlights From Kingsmen Creatives’ Annual General Meeting

Kingsmen Creatives Limited (SGX: 5MZ) is a leading communications design and production group that was established in 1976. The company has a network of 21 offices and full-service facilities serving global clients in its Exhibitions & Thematic, Retail & Corporate Interiors, Research & Design, and Alternative Marketing segments.

Here are seven highlights from the company’s recent AGM, held at their new headquarters (HQ) called Kingsmen Experience in Changi Business Park.

1. For the new HQ, there are still around 15,000 square feet to be rented out. It is currently only around 70% occupied, with 30% reserved for tenants. Kingsmen currently has three tenants but is looking for more so that they can receive additional rental income.

2. Kingsmen’s first NERF Family Entertainment Centre (FEC) in Marina Square is slated to open on 1 October 2019.

3. For the recent IP deal signed with Discovery Inc, the idea is to build Animal Planet travelling exhibitions and work with partners (so that capital expenditure will be much lower). Kingsmen will make use of content and footage from Animal Planet (including forests, oceans, space themes etc).

4. The sets will be mobile and will stay in one location for around 3-4 months before moving on. The idea is to build one set first but eventually, there will be 3-4 sets per year in various different locations. Kingsmen is able to do multiple sets as they have the global rights to the IP.

5. Potential partners will need to approach Kingsmen if they are interested in the NERF FEC or Animal Planet franchise, as Kingsmen has exclusive rights with the brand owners. This represents yet another potential income source for the group.

6. Kingsmen is in the process of negotiating even more IPs, and will announce these in the coming months as many of these deals are still in the discussion phase. The IPs will centre around the IP division’s three areas of focus – active play, live events, and edutainment.

7. For net profit attributable to shareholders, Kingsmen reported that it would have been S$11.5 million (instead of S$8.2 million) if a few items are added back, namely their investments in NAX (NERF Action Xperience), expenses incurred for their Nantong plant (to streamline production processes) and the opening of their USA office.

Kingsmen’s new IP division has so far snared three IPs – Hasbro’s Toybox and NERF, as well as Discovery Inc’s Animal Planet. It seems that more interesting times lie ahead for the group’s new division as more IPs are planned, and this will represent the next stage of growth for the group.

However, investors should note that these growth initiatives will take time to pan out, and during the gestational period, losses can be expected. There is also no guarantee that these new ideas will work out as the concepts are fresh and never been tried before. The mitigating factor is that Kingsmen’s core business of exhibitions, events, theme parks, and retail interiors is still doing well. Investors need to be patient in order to reap the fruits of Kingsmen’s efforts in the years to come.

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The information provided is for general information purposes only and is not intended to be personalized investment or financial advice. Motley Fool Singapore contributor Royston Yang owns shares in Kingsmen Creatives Limited.