The decline in the Group’s revenue was primarily due to a decrease of S$17.4 million or 25.4% in brokerage income from resale and rental of properties to S$51.0 million in 1Q FY2019, and a decrease of S$10.2 million or 29.9% in brokerage income from new home sales to S$23.9 million in 1Q FY2019. With the decline in revenue, cost of services decreased S$24.4 million or 26.4% to S$67.9 million in 1Q FY2019. As a result, the Group recorded gross profit of S$9.5 million in 1Q FY2019, approximately S$3.4 million or 26.5% lower compared to S$12.9 million in 1Q FY2018.
1Q FY2019 net profit was S$1.7 million, compared to S$5.9 million in 1Q FY2018. The S$4.2 million decline in net profit was primarily due to a S$3.4 million drop in brokerage income contribution as a result of lower transaction volume following the implementation of the cooling measures, and to a lesser extent, higher expenses of S$0.8 million, which includes among others, an increase of S$0.6 million in marketing activities and incentives and S$0.2 million in operating expenses of a new subsidiary, APAC Investment Pte. Ltd.
Outlook:
Commenting on the outlook for the Singapore market, Mr Chua said, “Looking at URA’s quarterly industry statistics, we believe that the property cooling measures implemented by the government in July 2018 have proven to be effective. With the ABSD and LTV restrictions in place, demand for Singapore residential properties will continue to remain weak and we expect the operating environment to remain challenging over the next few quarters.”
“In our endeavor to build a business with sustainable income growth and resilience through market cycles, we looked beyond the shores of Singapore and expanded in Indonesia and Thailand in February 2019. Whilst these businesses are stable and operate in markets of fast-growing economies, rising standards of living, and have an aggregate population of over 335 million, it will take time for us to realise synergies and grow their contribution to the Group,” said Mr. Chua.
APAC Realty has one of the largest brand footprints in Asia with more than 17,700 salespersons in 633 offices across 10 countries through its ERA franchisees. The Group remains well-positioned with a healthy balance sheet and cash balance of S$34.9 million as at 31 March 2019.
The current price of 50 cents seems like value is appealing!
I think the company might be able to payout 3.5 to 4 cents dividend.
I am looking forward for the 2nd quarter result in July/Aug cum dividend announcement of 1.5 to 2 cents dividend.
Not a call to buy or sell.
Pls dyodd.
The price seems to have came down from 62.5 cents after going ex.dividend of 2.5 cents .
It is now trading at 56 cents, that is giving a yield of 7.1% ( base on yearly 4 cents dividend instead of 4.5 ) of which I think is quite an attractive price level.
The company has a healthy FCF as can be seen from the FY2018 financial result.
I think the FCF is sufficient to cover the dividend payout of 4 cents a year.
Debts level seems quite ok at about 0.4% as can been seen from the Balance sheet.
If you take the Loans amount of 57.517m( 2.9 + 54.617) divide by Equity of 143.104m = 0.4% which is considered quite a healthy ratio.
EPS of 6.83 cents.
PE is about 14.5x.
NAV 40.3 cents.
Chart wise, looks bearish!
It is on a downtrend mode chart patterns.
Immediate support is at 55 cents.
The next support level is at 52.5 & 50 cents.
I think current price is trading at an attractive level as the fair value for Apac Realty is about 67 - 73 cents.
Not a call to buy or sell.
Pls dyodd.
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