Boustead

[Musicwhiz]

holdin on to some

The last few times they buy back is around 0.72+, if i rem correctly since the agm passed the resolution.

There is some hesitance to sink $ into engineering co now for me unless I m interested in collecting div.

Yes that's right. They bought back some at 72 cents back on December 3, 2009.

Boustead is an Engineering company, yes, and it pays good dividends of about 4 cents per share every year. I think it should be able to maintain the payout for this FY 2010.

[Musicwhiz]

Dear all, Part 3 of Boustead's 1H FY 2010 Analysis and Review has been posted on my blog. Please feel free to visit and leave comments. Thanks!

A snippet as follows:-

"Boustead Projects has managed to clinch a healthy pipeline of projects, as reflected by recent announcements to build Charles and Keith’s facility and also another for Singapore’s first private cancer hospital. However, the division’s revenue remains contract-based, which in my opinion is a weakness. It was mentioned previously in FY 2009 podcast that the Group wished to explore Design, Build and Lease contracts which could lock in recurring revenues and cash flows, but which offered a smaller margin compared to Design and Build contracts. Considering that Singapore’s real-estate sector is just emerging from the recession, there may be opportunities in time to come for REITs to buy over properties which are developed by Boustead Projects, thus ensuring the continuity of recognizing at least one sale of leasehold property transaction per financial year. In the meantime, prospects for the division should remain muted amid the uncertain global backdrop."

[millionairemind]

December 22, 2009, 5.55 pm (Singapore time)

Boustead's unit wins $107m contract

By UMA SHANKARI

SINGAPORE - Boustead Singapore on Tuesday said that its 91.7 per cent-owned subsidiary, Boustead Projects - a specialist in industrial real estate solutions - has been awarded a $107 million (US$76 million) contract to design and build an integrated manufacturing and support facility for one of the world's leading power systems corporations.

Boustead did not specify who the client was. The contract is the largest industrial real estate solutions contract secured by Boustead Projects to date.

Located at the Seletar Aerospace Park in Singapore, the facility will have a gross floor area of about 28,000 square metres, spread across two floors. The facility will also incorporate a large-scale advanced manufacturing setup and clean rooms.

With completion slated for the end of 2010, the facility is earmarked to be the first building in the Seletar Aerospace Park to attain Green Mark Platinum, Boustead added.

[Musicwhiz]

This is indeed very good news. Boustead Project's largest contract to date at S$107 million! But if only Boustead was able to clinch more DB&L contracts rather than D&B, to ensure steadiness of recurring income stream. Maybe that was the reason for the share buybacks in the last couple of weeks (2 of those days out of the last 3 weeks).

Nevertheless, I am happy to say that this contract will pay for my dividends for FY 2011.

[qxing78]

Hi MW, any idea what's the profit margin for these kind of design & build project by Boustead?

[Musicwhiz]

Hi MW, any idea what's the profit margin for these kind of design & build project by Boustead?

From my knowledge, they usually price it at cost-plus, so they earn a fixed margin even if costs to build the building escalate. This acts as a buffer but also limits their profit margin potential. I think it should be around 10-15% net; I believe FF Wong will not accept anything less (it was mentioned in an interview before I think).

[memphisb]

fantastic. great news.

[Musicwhiz]

This is the full article from BT today for everyone's reading pleasure:-

Business Times - 23 Dec 2009

Boustead unit wins $107m contract for aerospace facility

By MICHELLE QUAH

BOUSTEAD Singapore says a subsidiary has been awarded a $107 million contract to design and build an integrated manufacturing and support facility at the Seletar Aerospace Park.

Boustead's announcement yesterday said this is the largest industrial real estate solutions contract secured, to date, by the 91.7 per cent-owned subsidiary, Boustead Projects Pte Ltd.

The contract was awarded by an unnamed party, said to be 'one of the world's leading power systems corporations', according to Boustead's statement.

The facility will have a gross floor area of some 28,000 square metres, spread across two floors, at the Seletar Aerospace Park. Boustead said it would incorporate a large-scale advanced manufacturing set-up and clean rooms.

Completion is slated for the end of next year and the facility is earmarked to be the first building in the park to attain Green Mark Platinum.

'It is an honour for Boustead Projects to design and build an advanced integrated facility for one of the world's most respected names in power systems,' said Thomas Chu, managing director of Boustead Projects.

'We were selected by the client after progressing through a very stringent selection process which involved competition against many large international competitors. The facility will be a world-class showcase for our client and also boost Singapore's reputation as the leading aerospace hub in the Asia Pacific,' Mr Chu said.

Boustead added that the contract is not expected to have a material impact on the profitability, earnings per share or net asset value per share of Boustead in the current financial year ending March 31, 2010. But, it is expected to have a positive material impact on the profitability and earnings per share in the next financial year ending March 31, 2011.

Seletar Industrial Park is a 300-hectare aerospace park being developed to support Singapore's rapidly growing aerospace industry and is currently home to more than 20 global aerospace corporations.

Boustead shares finished half a cent up at 75 cents yesterday.

[winston]

Not vested. From DBS:-

Boustead: HOLD S$0.75; TP under review; BOCS SP

Won S$107m real estate contract, positive for FY11 Boustead's 91.7% owned subsidiary, Boustead Projects, has been awarded a S$107m contract to design and build an
integrated manufacturing and support facility, with a gross floor area of 28,000 sqm, for a world leading power systems corporation at the Seletar Aerospace Park.

This contract is the largest industrial real estate contract secured by Boustead
Projects to date.

As this project is slated for completion by end 2010, we do not expect significant impact for FY10 (YE Mar) but see significant contributions in FY11. This announcement brings FYTD order wins to S$167.6m, or about 67% of our full year new win assumption of S$250m.

Our Hold recommendation and TP under review pending more details from management.

[Musicwhiz]

Today, Boustead announced 2 disposals, one of its 30% stake in PT SMAC for US$600,000 and another of its 95.6% interest in Batam Logistics for S$955,556. In total, the transactions are expected to net them cash of S$1,795,556 (using 1 USD = 1.40 SGD). This will further add to their cash hoard.

The gain to be recognized on PT SMAC is about S$425,000, while the gain to be recognized on Batam Logistics is S$690,000. In total, the gain to be recognized for FY 2010 from these transactions is about S$1,115,000 (S$1.15 million).

With these 2 disposals of non-core businesses, Boustead can now focus on its core businesses of specialized Engineering Services and Geo-Spatial Technology.