(15-04-2012, 11:53 AM)CityFarmer Wrote: [ -> ] (14-04-2012, 09:37 PM)Musicwhiz Wrote: [ -> ]Hi CityFarmer,
While I do appreciate the core business of SPH generating a lot of FCF, it's what's done with the cash that's important. Assuming they plough it in to generate good returns for shareholders, then that's fine. If not, then they should simply increase their payout ratio and make shareholders very happy with the increased payout....
I agree. As shareholder, i am happy to see that as well.
FYI, FY2011 is 100% payout ratio
(14-04-2012, 09:58 PM)KopiKat Wrote: [ -> ]Agree, MICE is likely too tiny and possibly still not very profitable at this stage to warrant a separate segment. As 'Others' also likely include their 'Internet' biz (I think ShareInvestor.com + ??), I can't say for sure if the losses from 'Others' are due to MICE or Internet Biz or both. My guess is MICE is giving a profit and losses comes mainly from Internet Biz. This is cos' Losses from 'Others' declined from $15.6Mil in 1H11 to $5.6Mil in 1H12, so, I'm guessing the 'new' MICE biz is responsible for this improvement.
There was a related question asked during AGM last year. The answer is "other" carried mainly internet biz which SPH invested. SPH need to maintain all those biz with loses and manegement take it as "insurance premium" for its media biz. It is a necessity for risk management.
In FY2011, the other include MICE. I agree with Kopikat view that the loses mainly due to Internet biz, and improvement in FY2011 very likely due to MICE biz. The loses of "other" been consistent for FY09 and FY10, and improve after MICE biz added.
Great that these questions have been asked during the AGM. I'll love to ask too but somehow the shareholders always have many questions. In the end, I got no time to ask.
Anyway, back to the question on MICE. Yes, the internet and online business is been lumped together in the others category. However, come to think about it. How much could its internet and online business earns for SPH?
Though I did not ask but it is pretty obvious that the exhibition business would bring in the bulk of the revenue in the others category, considering the huge number of people who attended the IT Show, Commex every year. They have recently acquired the company who organises the IT show (or Commex?).
Looking at the huge number of people who attended these events, they could well earn their revenues from the rental of spaces to those technology companies and would be able to increase their rental income without having these companies running off. These events are good for promotions of their products and businesses.
As written below, during 1H FY2012, the bulk of revenue in terms of percentage growth comes from the Others category again.
Quote:First Half Results ending 29 Feb 2012
Operating revenue
Newspaper and Magazine 496,830 499,761 (0.6)
Property 94,867 76,295 24.3
Others 39,160 30,481 28.5
Operating revenue from the Group’s other businesses rose by S$8.7 million (28.5%)
to S$39.2 million, with the increase coming from the internet and exhibitions businesses.
At the moment, the MICE business is too small but look at what the government intends to do for the MICE sector in the following news.
http://www.channelnewsasia.com/stories/s...06/1/.html
The MICE business is growing and I don't think there are a lot of publicly listed businesses in SGX that is dealing with MICE. In any case, there are three reasons why I buy into SPH.
1. The business would still be around 20 years from now.
2. The management decides to diversify to different sectors, knowing that its print business would shrink with the coming of the internet. This shows that the management at least take care of shareholders.
3. It's print business is the monopoly and it is hard to break into the newspaper business in Singapore.
I see SPH as a tortoise who is slowly moving forward. SPH forms part of my stable portfolio. I've got other stocks as growth stocks (e.g. Ezion) so I do not mind sitting back and waiting for the dividends to come in every year while waiting for it to move forward slowly.