Excerpts from Lim & Tan Securities report
Lian Beng ($0.545, down 0.5 cent) has reported FY15 headline net profit of $108.0 mln (+24% yoy), mainly boosted by a $52.4 mln fair value gain from revaluation of its dormitory property as well as increased contribution from share of profits from its associates and joint ventures (JVs).
Overall revenue increased by 9.4% to $747.0 mln in FY15 as turnover in Construction segment jumped by 46.7% yoy, arising from higher recognition from the on-going and new construction projects. Construction segment continues to be the main contributor to the group’s revenue, contributing 84.3% to the overall revenue while its Ready-mixed Concrete segment and Dormitory segment accounted about 12.5% and 3.0% to the group’s revenue respectively.
However, group gross profit declined by 36.7% yoy to $79.3 mln in FY15 from $125.2 mln a year ago, mainly due to recognition of profit upon completion of the industrial development project, M-Space in FY14 based on Completion of Construction Method.
Final dividend proposed is 1 ct and a special dividend of 1 cent. Together with the interim dividend of 1 ct, the total dividends for FY15 = 3 cents per share, translating into an annualised yield of 5.5%. NextInsight file photo.The share of profits of associates and joint ventures rose to $43.6 mln in FY15 (from $4.2mln in FY14) mainly due to the gain on disposal of the effective 19%-owned joint venture, 122 Middle Investment Pte Ltd, which owned the proposed hotel development at 122 Middle Road.
The recognition of the group’s share of profits of associates and joint ventures from the development projects namely, Newest, KAP Residences and The Midtown had also positively contributed to the its share of profits of associates and joint ventures in FY15.
In line with the higher profitability, the group has declared a final DPS of S$0.01 and a special dividend of S$0.01 per share. Together with the interim DPS of S$0.01, the total dividends payout for FY15 will amount to S$0.03 per share, translating to an annualised yield of 5.5%.
Going forward, Lian Beng aims to enlarge its recurring income from dormitory, property investment and construction-related services, as a means to balance its project-based construction and property development businesses. On its core construction business, the group’s order book as at 31 May 2015 stood at approximately S$552 mln, providing it with sustainable flow of construction activities through FY17.
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