SINGAPORE PRESS HLDGS LTD (SGX:T39)
Singapore Press Holdings (SPH) - FY21 Stark Rebound, No Longer Dragged Down By The Media Segment
- SPH reported a strong set of FY21 results operating profit up 70% y-o-y while PATMI was strong at S$93m, backed by strong contributions from the PBSA and retail & commercial segments. The transfer of the media segment is expected to be completed in Dec 21 while the EGM for Keppel Corporation’s privatisation offer is set to be held in mid-Nov 21.
- We recommend shareholders to ACCEPT Keppel Corporation’s offer at S$2.099/share given the fair valuation of SPH, in our view.
FY21 overall revenue up 7% y-o-y, PATMI back to black; final dividend of S$0.03
- Singapore Press Holdings (SPH, SGX:T39)’s FY21 group operating profit was S$207m, up 70% y-o-y. Full-year PATMI stands at S$93m which includes a S$128m loss from discontinued operations. Final dividend came in at S$0.03, resulting in a total S$0.06 per share dividend for FY21 (FY20: S$0.025). This is in line with Keppel Corporation (SGX:BN4)’s proposal that the final dividend shall not be lower than S$0.02 cents nor exceed S$0.03 per share.
Retail and commercial property: Buoyed by gradual market recovery.
- SPH’s FY21 property PBT grew to S$206.9m (FY20: -S$56.3m), largely contributed from the first full-year contributions from several assets and lower rental reliefs to tenants. Contribution from SPH REIT (SGX:SK6U) increased to S$149.7m (+23.3% y-o-y) from S$121.3m in FY20, backed by resilient sales from its portfolio.
- Overall portfolio tenant sales remained resilient and grew 2% y-o-y despite a 20% y-o-y decline in footfall caused by lockdown restrictions. Sales from suburban malls (Clementi Mall and Seletar Mall) are back to pre-COVID-19 levels due to them being located in strong catchment locations. Although SPH REIT’s overall occupancy remains high at 98.8%, there was negative rental reversion of 8.4% due to soft retail leasing sentiment.
- SPH REIT has a healthy portfolio WALE of 5.4 years by net lettable area (NLA) and 2.7 years by Gross Rental Income (GRI). We reckon that with higher vaccination rates in both Australia and Singapore, the retail segment will be able to rebound when COVID-19 restrictions are eased.
Student accommodation assets: New year, new beginning.
- Target revenue for academic year (AY) 21/22 has already reached international borders to students would provide strong demand for student accommodation.
Media: It’s time to say goodbye.
- The media process has started and is expected to be completed in Dec 21.
Approval for Keppel privatisation offer underway.
- As a recap, Keppel Corp announced a proposed privatisation offer for SPH through a controlling stakeholder would allow SPH to focus on executing its business strategies.
- Keppel Corporation’s offer seems to have taken an overall fair valuation for SPH, albeit with a slight conglomerate discount which we think is fair. The privatisation is expected to be completed in Dec 21 upon approval.
SPH - VALUATION
- We maintain our SOTP-based discontinued operations while adding our forecasts for FY24.
- See
- Catalysts to SPH's share price:
- Stronger-than-expected footfall for retail malls,
- strong bookings from international mmodation assets,
- superior competing offer for SPH as a whole.
Llelleythan Tan Yi Rong
UOB Kay Hian Research
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John Cheong
UOB Kay Hian
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https://research.uobkayhian.com/
2021-10-07
SGX Stock
Analyst Report
2.100
SAME
2.100
