I recently attended Kingsmen Creatives’s presentation at Invest Fair 2010. The company presentation was given by Mr Andrew Cheng, Group General Manager and the talk was entitled “Positioned for Growth”. I will list the key points covered during the talk and the Q&A section, as follows:
- Generally, looking at past trends, second half of the FY brings about more revenues than first half due to sprucing up of shops and theme parks during year-end period. First half contribution – 40%, second half – 60%.
- 70% are repeat customers. Kingsmen knows their client’s style and thus, can cater to their needs easily.
- Future growths: MICE industry growth both in Singapore and region; Universal Studios Phase 2, 3 and maintenance; theme parks and attractions to be built (eg. Legoland, Universal Studios Dubai, Hongkong Disneyland, etc); mega events like F1; re-making of Orchard Road; Marina Bay Sands Shoppes; alternative marketing programmes (eg. LED billboards); fixtures export – increasing interest from US, Europe.
After the talk, a few of us mobbed Mr Cheng to ask him more questions and he was more than happy to answer them. It was in a more relaxed environment and I felt he was very honest in answering those questions. The discussions are as follows:
- Universal Studios Singapore project was a first for many companies involved in it. So, the learning curve was very steep and profit margins were slim. In fact, Kingsmen thought of foregoing taking up Universal Studios project as it felt that it didn’t have enough expertise. But, as a shareholder, I feel that Kingsmen did an outstanding job and should be given a pat on the back. In the future, Kingsmen is poised to take advantage of future mega-scale projects like Universal Studios since it already has the experience under its belt.
- Kingsmen follows a supply chain model where it sub-contracts out the fit-out and because of this, it can be stringent on the quality of the work and rejects any work that are not up to standard without affecting its own business.
- Recently, the company announcements by Kingsmen were almost non-existent even though they won a couple of contracts. Mr Cheng said that they would rather announce in one go than in bits and pieces. I was satisfied that at least Kingsmen is aware of this.
- Liquidity wise, there are many buyers but not many sellers in the market. Kingsmen ever thought of doing a rights issue and stock splits to increase liquidity but decided against them. Mr Cheng believes when revenue hits around $500 million, the institutional buyers will become interested and liquidity will be boosted.
I snapped a few pictures of the slides (pardon me for the poor quality of the images):
Below is a brochure obtained from Kingsmen’s booth:
Lastly, if you have the patience, you can hear a recording of the whole 30 mins presentation that I have uploaded at 4shared. The background noise was overwhelming during the talk so you may have to strain to hear the recording properly.