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One of the larger investments in my non-REIT investment portfolio is in SPH. Actually, SPH is also one of my oldest investments for income.
Most of my investment in SPH is priced between $2.86 to $3.55 a share with a more recent tranche at $4.20 a share purchased in 2013 when SPH REIT was created.
Wah! $4.20 a share? Then, lost money already lah. Well, some might look at it that way.
For me, as an investor for income, assuming a DPS of 21c at the time, I was looking at a 5% dividend yield. With a much stronger balance sheet than SPH REIT, SPH made more sense to me as an investment for only a slightly lower dividend yield.
When SPH REIT was created, SPH declared a special dividend of 18c a share while retaining major ownership of both Paragon and Clementi Mall. In fact, when the counter went XD back then, I added to my investment again at $4.03 a share. (See: The mystery of the extra money in my account.)
Will SPH declare another special dividend when it sells a percentage of its stake in Seletar Mall to SPH REIT? Very likely.
Seletar Mall is 70% owned by SPH and the other 30% is owned by UE. It would probably be cleaner for SPH to take 100% ownership of Seletar Mall before injecting the asset into SPH REIT.
Of course, only time will tell how things progress but we know for a fact that SPH REIT has been granted right of first refusal on Seletar Mall by SPH.
Visiting Seletar Mall has been on my to do list for a while and, recently, I did.
I didn't see any vacant shop space and I saw a pretty good crowd on a weekday evening.
I am sure it will be a matter of time before SPH REIT is offered Seletar Mall and, as a SPH shareholder, I am looking forward to that day.
Patience will surely be rewarded.
Related post:
SPH or SPH REIT?
SPH Reit Management CEO Susan Leng said that SPH has granted a right of first refusal to the Reit, but it is only when the sponsor has decided to divest the property that the Reit can evaluate the opportunity... - Source: AsiaOne
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17 comments:
Seletar mall is crowded as the Sengkang compass point is closed since late last year & no other good malls nearby. Nex & waterway point are quite some distance away.
it may be better to test waters again when Sengkang 1/compass point opens again.
Hi GP,
Do you stay in Sengkang? Nothing beats insights from residents there, of course.
Kamsiah you plenty plenty. :)
Hi Ak,
I have been a Sengkang's resident for 18 years.
My ranking for the malls:
1) Compass One (Reopening soon).
2) Waterway Point.
3) Hougang Mall.
4) Seletar Mall.
5) Rivervale Mall (Too small-scale)
Just my 2 cents ;-)
Hi Dennis,
Wow! I hope SPH chop chop sell Seletar Mall to SPH REIT, then. ;p
I stay near Sengkang, & I am awaiting the reopening of compass one.
I would put nex & waterway point on the top of the list.(reviews for compass one reserved ATM)
only selling point of seletar mall is Shaw Cinema but there is a good competition from Shaw @ nex & waterway point.
Hi AK,
SPH just announced its third quarter earnings and what're your views on its disappointing earnings?
Are you going to stay vested or any plans for divestment going forward?
I feel they will be more eager to divest seletar mall to sph reit to prop up their financials for Q4 and full year.
Hi Kevin,
I don't think it is anything new. Their print business is in decline.
Much of the disappointing numbers has to do with impairment charges. At the operating level, it is not so bad.
It is still a profitable business and I will stay invested.
Singapore Press Holdings Limited (SPH) today reported its results for the third quarter ended 31 May 2016 (3Q 2016), turning in a net profit attributable to shareholders of $52.7 million. This was $45.6 million or 46.4 per cent lower compared to the same period last year (3Q 2015).
The results for the current quarter were impacted by impairment charges of $28.4 million, which primarily related to the magazine business whose performance was affected by unfavourable market conditions.
At the operating level, group recurring earnings of $60.8 million was $44.4 million or 42.2 per cent lower year-on-year ("yoy"). Excluding the impairment charges, group recurring earnings would have fallen by $17.1 million or 16.1 per cent.
Group operating revenue slid $15.2 million or 5.0 per cent yoy to $291.6 million, as structural challenges confronting the media industry and the sluggish economic environment continued to weigh on the performance of the group's core Media business.
Source: http://business.asiaone.com/news/sph-reports-third-quarter-net-profit-527-million
Hi AK,
If I did not remember wrongly, SPH is generating negative free cash flow for Q3 and also Q2.
I am currently vested but watching closely too. ;-)
Hi Kevin,
Historically, there were certain quarters when SPH generated negative free cash flow. So, I see this as something normal and not something we should worry about.
However, it is a good idea to see how the full year turns out. :)
any pretty good crowd at paragon?
Hi tong,
The Paragon always attracts a good quality crowd. ;)
The Paragon has commercial units besides retail like law firms and citigold and also a medical wing. The tais tais will be able to do their aesthetic treatments and do their retail shopping and dining in an all in one environment. :P
Hi Kevin,
Symbiosis! I like the sound of that! ;p
"MediaCorp Pte Ltd. entered into a conditional sale and purchase agreement to acquire remaining 20% stake in Mediacorp TV Holdings Pte. Ltd. from Singapore Press Holdings Limited (SGX:T39) for SGD 8.6 million on August 25, 2017. ... MediaCorp Pte Ltd. completed the acquisition of remaining 20% stake in Mediacorp TV Holdings Pte. Ltd. from Singapore Press Holdings Limited (SGX:T39) on September 29, 2017. As of September 29, 2017, all conditions have been fulfilled."
Another unlocking of value? How do you feel about this AK? When there's lots of divestment, find it difficult to assess the valuation of the company.
Hi everydaypengs,
I doubt that this has any significant impact on SPH.
SPH, like many old economy businesses, has been disrupted and remains challenged.
I am holding on to my investment from donkey years ago but for me to accumulate, things will have to improve significantly for SPH or the share price has to decline a lot more.
Thanks AK. Was uninitiated until today. Nibbled to keep my interest pricked.
Hi everydaypengs,
It would be interesting to see if SPH could stop its slide downwards or at least slow down the speed of decline. The accelerated slide downwards last year caught me by surprise as I was expecting a slow drift downwards for its media business.
See:
Fate of my investment in SPH.
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