Get a copy for $5.00 at news-stands. The Edge Singapore (Sept 29-Oct 5 edition) carries an insightful article by Gwyneth Yeo on the Singapore Flyer's challenges and how its receivers tackled them after they were appointed in May 2013. Reading the article, one can only agree that the Singapore Flyer has "enormous upside," as receiver Tim Reid said, under the new owner which is majority-controlled by Straco Corporation.
Some points:
1. Some tour agencies were receiving discounts for bulk purchases of 5,000 tickets even when they were only buying several hundred tickets.
2. The agencies were allowed to pay through credit cards, resulting in the Flyer incurring credit card charges of 2.5% to 5%.
3. Some tour operators who had tour desks at the Flyer were touting and re-selling tickets to walk-in visitors for a profit.
When the latter practice was stopped with the closing down of the tour desks, daily takings at the Flyer's counter went up from S$30,000-$40,000 to as much as $60,000-$115,000 on some days (especially important holidays).
4. For the first seven months of 2014, the Flyer's revenue rose 9% y-o-y while earnings before interest, taxes, depreciation and amortisation (Ebitda) margins increased 50%.
5. Some tenants had not paid their rents for months -- but paid up when asked.
6. Some tenants demanded that their leases be renewed for three years. Their existing rentals were less than 50% of the market rate.
The tenants were given the option of either renewing their leases for three years at current market rates or continuing at existing rates with "reviews every three months." All the tenants chose the latter.
7. The receiver decided not to commit to new major leases in order not to place the incoming new owner of the Flyer in an onerous situation. For example, a F&B company was declined a lease of the Flyer's banquet halls for a three-year period with a right of renewal.
|
|
Recent stories:
Kyith Ng: "Ways To Boost Profit Of Singapore Flyer"
STRACO: Notional net profit rise was 42% for Q1
Comments