The Hour Glass

[crabcrab]

In an AGM 2 years back, Crabcrab asked Chairman Tay if he would be considering distributing out GEM TV shares to its shareholders in proportion so as to let the individual shareholders to make decision on the GEMs TV shares.

He replied that it would be too expensive to have this distribution exercise.....

Too expensive? What rubbish. It would simply be a dividend in specie. It would be trivial to just divide the number of Gems TV shares held by the number of Hour Glass shares to determine each shareholder's entitlement. Pay out a quantity representing round lots, then keep or sell off the balance.

SIA did this with SATS. Chuan Hup did it with CH Offshore. Pan United did this with Pan United Marine. MPH did it with AV Jennings. These spinoffs were of large subsidiaries so they had to go through EGMs too.

For Hour Glass, Gems TV was a passive investment and divestment would have had no effect on operations. Even if it still required an EGM, the Tay family owns a controlling stake so the vote would have been a done deal. "Too expensive" is a lame excuse.

Because the Tays refused to offload the Gems TV shares when they could, the stake which was valued at $72m in the 2007 annual report became just $2.3m in the 2010 annual report. This "too expensive" excuse cost shareholders nearly $70m. Now THAT is expensive.

A relationship worth notice is that Mr Jason Choo, Chairman of GEMS TV, is Tay's son-in-law.....

[MrValue]

A relationship worth notice is that Mr Jason Choo, Chairman of GEMS TV, is Tay's son-in-law.....

Nephew-in-law to be exact, or Michael's cousin-in-law.

[dydx]

Q3-FY11 results announcement just out and makes interesting reading.....
http://info.sgx.com/webcoranncatth.nsf/V...A0018337F/$file/THGL_3Q_FY2011.pdf?openelement

While YTD 9 months' Revenue only increased 3% to $377.1m, both PBT and NP have advanced a strong 31% to $34.63m and $26.55m, respectively. After deducting a $3.09m fair value gain on investment property, the adjusted increases in PBT and NP still show a healthy increase in profit margin in THG's regional watch wholesale/retail business.

Bearing in mind the business should have a strong showing in Q4, FY11 (ending 31Mar11) full-year EPS is poised to hit $0.16 (based on 1st 9 months' EPS of $0.1134, and Q3's EPS of $0.0467). At today's closing share price of $1.03, THG is now being priced by Mr Market at a PER of only 6.44x!!

Assuming a full-year EPS of $0.16, and bearing in mind the company paid out $0.035/share based on an EPS of $0.1408 in last FY10, is it reasonable to expect THG to pay out a higher Final dividend of say at least $0.05/share for FY11?

[corydorus]

Noticed their stocks level pretty high.
Even with this Q larger profits with surprisingly marginal Rev increase, the inventory still shoots.

Any comments ?

[pianist]

what are their investment property?

[crabcrab]

Swiss watchmaking in December 2010
Excellent Year End

Watch exports showed a high rate of growth in December 2010, despite a less favourable base effect. Their value, at 1.5 billion francs, exceeded by 25.8% the result achieved in December 2009. The year 2010 ended with a level of 16.2 billion francs, an increase of 22.1% compared to 2009. Results for the sector were therefore slightly above the value recorded in 2007.

The value of wristwatch exports rose for all materials in December. Steel, gold and bimetallic were among the main drivers of growth. In volume terms, steel timepieces registered a strong increase, markedly influencing the overall result. Bimetallic products recorded the most pronounced growth. In total, Switzerland exported 430,000 more watches than in December 2009.

All price segments performed well in December. The 200-500 franc range (export price) stood out with an increase approaching 60% both in value and volume terms.

Watch exports to Hong Kong continued their very pronounced upward trend, while the United States achieved virtually the same result as in December 2009. China showed particularly substantial growth, underlining still further a very strong trend. Still the number one destination in Europe, France recorded a performance well above average, while Italy stagnated and Germany only slightly exceeded its level of December 2009. In fifth position, Japan continued its spectacular recovery.

SOURCE: FHS

[dydx]

I guess the above report (source?) simply confirms the resilience of global demand for Swiss (mechanical) branded wristwatches. This sustainable growth of underlying global demand for Swiss watches can be explained by a simple notion: That for those who can afford it, they would buy a simple, lower-end Swiss watch - like a Tag Heuer, Omega, etc. - when they are young. Many of them would buy a more expensive, higher-end Swiss watch - like a Rolex, Hublot, etc. - when they have risen to a higher income or status. And some of them may buy 1 or more expensive, high-end Swiss watch - like a Patek Philippe, etc. - at a later part of their lives.

For watch distributors/retailers like TGH and others, this sustained demand assures them a good-enough operating environment to continue a decent business and pursue business growth over time. But just like in most businesses, only those who are guided by the right business principles and strategies, and who are able to operate their business efficiently, can assure for themselves good and sustainable profitability.

[Musicwhiz]

Note: I am not vested.

Business Times - 08 Feb 2011

Hour Glass opens flagship at Knightsbridge

By ARTHUR LEE

THE Hour Glass has taken watch retailing to a whole new level with the opening of its premier branch at Knightsbridge on the eve of Chinese New Year.

Here, Rolex lovers can view a display of some 30 pieces of early sports models, several of which are extremely rare.

They are from their 'museum' collection and span 50 years. On display are the Comex sub, several early model Daytonas, Milgausses, and even a very old GMT with bakelite bezel.

There is also an exclusive range of pink diamonds for lovers of fine jewellery.

Not to be left out, perfume lovers will enjoy a new experience through three tall glass cylindrical columns about a metre in diameter.

This allows the selected perfume to infuse the air inside for one's approval. A vacuum at the base will clear the current selection before the next one is released.

Walking into the double- storey, 8,000-square-foot store gives a first impression of a sophisticated exhibition centre.

Its floor is made out of fine timber from France and the individual brand names are laid out neatly around the main hall's perimeter. There is even a functioning 200-year-old 2m-tall antique clock on display.

In the centre of the passageway leading in is a giant sculpture. Flanking it are halls representing premier brands.

Further inside, another hall has been named the 'Napoleon Room'. Its walls are adorned with paintings and 11 swords and sabres dating back from 1780 to 1850.

Throughout, historical artefacts, antiques, and art pieces are liberally displayed to create a world of luxurious authenticity.

These range from tribal art pieces to a Patek Philippe electronic master control clock which once kept time at Zurich Airport.

A Steinway grand piano catches the eye as one walks upstairs.

Glajz jewellery shimmers under the spot lamps while a room for private clients is adorned with a 'celestial sky' motif on its ceiling.

Even the powder rooms are appointed with motion sensors that lift the cover of the water cistern as you approach.

Hour Glass closed its first Orchard Road store - opened 31 years ago - at Lucky Plaza last month.

Executive director Michael Tay said the relocation marks the end of the previous chapter and the start of a new one.

The planning for the new store started three years ago but the challenge was in finding a suitable place and putting it all together.

He added that a lot of well-known brands tend to open similar looking stores worldwide, making them look a bit like McDonald's. To stand out, he believes that originality matters.

[Jon-san]

Am curious, who did the ID for the store? Ayone knows?

[freedom]

Kingsmen Creative, someone mentioned before.