Singapore Post

[la papillion]

Haha, yes, I suppose you can say that

[millionairemind]

Brokers' Take

Singapore Post
Feb 2 close: S$0.78
KIM ENG RESEARCH, Feb 2

REVENUE for Q3 FY2009 (the three months to end-December) rose by only 1.6 per cent y-o-y, a sign of the slowing economy. But net profit (down 0.5 per cent y-o-y, and down 2.3 per cent q-o-q) was still within our expectations.

SingPost will be a beneficiary of the recently announced Budget goodies, specifically the Jobs Credit scheme and the one percentage point cut in corporate tax rate

. Despite slowing revenue growth, we expect margins to stay resilient as 80 per cent of operating costs are readily adjustable with 25 per cent of labour costs (temporary and contract workers) highly variable.

SingPost remains attractive as a dividend play for its strong free cashflow of more than $50 million per quarter. Management is still committed to paying a minimum of five cents a share, while we project 6.7 cents for FY2009, which is based on a 85 per cent payout ratio (81 per cent in FY2008), leading to a dividend yield of 8.6 per cent. Maintain 'buy'.
BUY

[millionairemind]

Published July 31, 2009

SingPost Q1 net profit dips
Total revenue climbs a marginal 0.7% to $121.8m; mail revenue down 7.2%

By CHEN HUIFEN

SINGAPORE Post (SingPost) has posted a marginal 0.1 per cent dip in its fiscal first-quarter net profit to $39.4 million, as the group coped with lower mail revenue and higher operating expenses during the period.

Mr Tan: 'The performance of our business segments in the first quarter clearly reflects the continued weak economy and lower demand.'

For the three months ended June, mail revenue - which accounted for the lion's share of its total revenue - fell 7.2 per cent to $85.9 million. Despite increases in its logistics and retail businesses, total revenue climbed only a marginal 0.7 per cent to $121.8 million.

'The operating environment remains challenging and difficult,' said SingPost CEO Wilson Tan. 'The performance of our business segments in the first quarter clearly reflects the continued weak economy and lower demand.'

Total expenses increased 5.5 per cent to $84.7 million, mainly attributed to the consolidation of G3 Worldwide Aspac Pte Ltd (G3AP), a provider of cross-border mail services. Labour and related costs rose 2.5 per cent to $33.6 million, even as the group gained some $2 million from the Jobs Credit Scheme.

SingPost does not have any short-term debt as at end-June. But it owed $301.8 million as a result of a $300 million bond issue that will mature in 2013. The bonds have a fixed interest rate of 3.13 per cent per annum.

Cash and cash equivalents stood at $184.9 million. Earnings per share slipped to 2.045 cents, from 2.051 cents. The group has proposed an interim dividend of 1.25 cents per share. Net asset value fell to 12.67 cents, from 13.30 cents as at end-March.

The group is banking on two recent acquisitions to expand into new markets. It recently bought the remaining 50 per cent that it did not own in G3AP and acquired a 30 per cent stake in US-based postal technology firm Postea.

With G3AP, SingPost will focus on opportunities to expand beyond cross-border mail business and extend its services to the rest of Asia-Pacific. As for Postea, it is looking at joint development and marketing of postal and logistics technologies.

SingPost shares ended up half a cent at 89 cents yesterday.

[winston]

SINGAPORE POST - BNP Paribas has initiated coverage of Singapore Post with a "buy" rating and a target price of S$1.28 a share, almost 40 percent above its last closing price, citing a rebound in mail volumes and on hopes of a special dividend due to the company's strong balance sheet.

[lendevear]

There is definitely still room for growth for Sing Post. Consider there are about 60,000 new private homes to be built from now till 2013, excluding HDB. Once the homes are built, new families, immigrants will be receiving mails from billers. Though I might be double counting some, but for SP to maintain at least current dividend payout is no difficult feat.

I might calculate the figures and post them on my blog if I can find time from work and studies. But if you are not looking for multi baggers but just pure dividend income plus good night sleep, SP is the one for your portfolio.

[winston]

1) Not sure whether that 60,000 households will contribute much to Revenue. And over 5 years..

2) Companies are also reducing the mailing of stuff eg. Air Miles Updates, Hotel Points etc. It's all done thru emails now.

3) For the companies that continue to mail stuff eg. bank statements etc, SingPost could increase the rates. It's a monopoly unless the courier companies can do it cheaper.

4) You probably dont need so many big post offices. Just a small neighbourhood one will do. Maybe they could go into Property Development as well ?

[Aspellian]

There is definitely still room for growth for Sing Post. Consider there are about 60,000 new private homes to be built from now till 2013, excluding HDB. Once the homes are built, new families, immigrants will be receiving mails from billers. Though I might be double counting some, but for SP to maintain at least current dividend payout is no difficult feat.

I might calculate the figures and post them on my blog if I can find time from work and studies. But if you are not looking for multi baggers but just pure dividend income plus good night sleep, SP is the one for your portfolio.

Can always consider buying ANNUITY??

[Aspellian]

Capital Group has disposed 63.3mm Singpost shares from April, May and most recently in Sept 09.
always surprising that broker reports say BUY when the major shareholder wants to sell. What a coincident!!

[la papillion]

There is definitely still room for growth for Sing Post. Consider there are about 60,000 new private homes to be built from now till 2013, excluding HDB. Once the homes are built, new families, immigrants will be receiving mails from billers. Though I might be double counting some, but for SP to maintain at least current dividend payout is no difficult feat.

I might calculate the figures and post them on my blog if I can find time from work and studies. But if you are not looking for multi baggers but just pure dividend income plus good night sleep, SP is the one for your portfolio.

SG blue chips is here...oh man, i must have been dormant for some time

One thing I don't like about singpost is that it's quite leveraged. But I suppose that's the nature of their business. Vested btw.

[kennynah]

all postal services companies are at the mercy of the size the population they serve... and here in singapore... we are probably amongst the smallest countries ..

how then can a company like singpost ever become a very rich company??? i just dont see it happening..