"Rock" contributed this article, which builds on his earlier forum post, to NextInsight

tix4.15Tourists at Singapore Flyer. NextInsight file photo
When the news emerged in 2014 of Straco Corp buying over Singapore Flyer, Straco shares were sold down from 83.5 cents to as low as 72 cents.


The question on many shareholders' mind during that time: Will Singapore Flyer be profitable or a liability to the company? 

Time has proved that buying Singapore Flyer was a wise move.

Mr Wu Hsioh Kwang, Straco's founder and executive chairman and his team, through years of experience have developed plans and calculated all the risks in order to land this spectacular deal.

Straco has turned around Singapore Flyer and made it profitable from day one.

netcash8.17Before buying over 90% of Singapore Flyer, Straco was debt-free.

After that, Straco's total debt stood at $93.3 million while it held $112.5 million cash. It was still in a net cash position of $19.1 million. 

Today, about 2.5 years later, Straco has used its strong operating cashflow to pare down its borrowings.

Total debt decreased by $37.6m. In 2.5 years Straco debt had reduced by 40%. 

The outstanding amount decreased from $93.3m to $55.9m.

Straco's net cash shot up from $19.1m to $$103.6m. Total net cash increased = $84.5m. 

In 2.5 years net cash had increased by 442% -- and it had continued to pay dividends and it did some share buyback. 

 

$’000

2012

2013

2014

2015

2016

1H2017

Dividend (to owners)

6.5

10.5

17.0

17.2

21.5

21.5

Dividend (to minority owners)

0.4

1.3

1.3

1.2

1.6

1.7

Share buyback

4.6

0.1

0.6

4.2

0.5

0.0


With so much cash in hand, Straco is capable of doing another fruitful M&A deal.


Straco has proven to be truly a cash-generating machine and I will be holding on to this stock for as long as the company continues to generate rich cash.


Share Prices

Counter NameLastChange
AEM Holdings0.930-0.025
Alliance Mineral0.2150.005
Anchor Resources0.0270.002
AusGroup0.035-0.001
Avi-Tech Electronics0.300-
Best World Int.2.680-0.040
China Sunsine1.270-0.030
CSE Global0.425-0.005
Food Empire0.520-
Geo Energy0.2000.001
Golden Energy0.240-
GSS Energy0.1210.006
HMI0.540-
ISDN Holdings0.199-0.006
KSH Holdings0.5300.005
Miyoshi0.041-0.002
Moya Asia0.0800.001
Nordic Group0.385-0.015
Oxley Holdings0.2950.005
REX International0.079-0.001
Riverstone1.100-0.010
Roxy-Pacific0.405-
Sing Holdings0.395-
SingMedical0.420-0.010
Sino Grandness0.105-0.006
Straco Corp.0.730-
Sunningdale Tech1.490-0.030
Sunpower Group0.400-
The Trendlines0.1010.005
Tiong Seng0.270-
Uni-Asia Group1.1900.010
XMH Holdings0.161-0.024
Yangzijiang Shipbldg1.340-0.010

NextInsight RSS

rss_2 NextInsight - Latest News

Online Now

We have 796 guests and no members online