Standard & Poor's Research on Lum Chang
Per Share Data
FY Jun. 2012 2013 2014E 2015E
Book Value (SG cents) 42.46 46.03 49.20 52.34
Cash Flow (SG cents) 6.4 6.8 6.2 6.2
Reported Earnings (SG cents) 5.6 5.8 5.2 5.2
Dividend (SG cents) 2.0 2.0 2.0 2.0
Payout Ratio (%) 35.2 34.7 38.7 38.9
PER (x) 6.1 6.0 6.6 6.7
P/Cash Flow (x) 5.4 5.1 5.5 5.6
P/Book Value (x) 0.8 0.7 0.7 0.7
Dividend Yield (%) 5.8 5.8 5.8 5.8
ROE (%) 13.7 13.1 10.8 10.1
Net Gearing (%) 0.0 20.6 17.8 16.0
LCH FY13 (Jun.) net profit of SGD21.5 mln (+2.3% YoY) took into
account net fair value gains on investment properties of SGD5.8 mln,
which stripped out, sees SGD15.6 mln in adjusted net profit. The latter
came in above our expectations with better-than-expected gross
margin of 10.9% (FY13E:9.5%) and lower taxation. These were
partially offset by higher administration expenses and marketing
expenses. A final net DPS of 1.25 cent was declared, bringing the total
net DPS for FY13 to 2 cents (FY12:2 cents)
FY13 group revenue rose significantly at 75% YoY to SGD494.6 mln,
driven by: (i) higher construction revenue (+69% YoY) with the
commencement of Science Park Drive and Nucleos at Biopolis Road
projects; and (ii) property revenue (+140% YoY) with more phases
completed and recognized for its Malaysian development properties.
This was partially offset by: (i) weaker FY13 gross margin at 10.9% (-
2.1%-pts YoY) due to rising construction costs; (ii) higher distribution
and marketing cost (+87% YoY); and (iii) administration cost (+31%
YoY) attributable to higher staff expenses and acquisition costs
incurred from the recent purchase of its London property. Excluding all
net fair value gains and gain on disposal in FY12 and FY13, the
group’s adjusted net profit would have increased about 16% YoY.
LCH’s order book stands at SGD474 mln. The construction sector
outlook remains sanguine as the Government continues to accelerate
infrastructure spending to keep in line with population expansion.
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