SINGAPORE(Mar 19): David Lum, managing director of Lum Chang Holdings, recently bought more shares in the contractor-cum-property developer. From March 6 to 12, his privately held investment vehicle Beverian Holdings purchased 1.7 million shares in Lum Chang in the market, for between 36.7 and 37.5 cents each. This brings Lum’s direct and deemed interest in Lum Chang to 20.7%, or 79.2 million shares.
Lum’s purchases come after a number of contract wins by the company. In October last year, Lum Chang said it had won an $86.7 million construction contract for an integrated development at 2 Serangoon Road, formerly known as The Verge. The contract was awarded by Corwin Holding, a joint venture (JV) between Lum Chang and a fund run by LaSalle Investment Management Asia.
Then, in January, Lum Chang said it had been awarded a contract to build PSA Singapore’s new corporate headquarters. The contract is valued at $136.9 million and includes additions and alteration works to the existing Pasir Panjang Terminal Building 3.
In the meantime, Lum Chang has been making more property investments. In May 2016, the company said it would acquire One Tree Hill Gardens for $65 million in an en bloc deal. More recently, in December, Lum Chang said it had formed a JV with a unit of CapitaLand to invest in a multi-tenant office building in Frankfurt, Germany.
The property will cost the JV $375.1 million. Lum Chang will have a 5.1% stake in the JV vehicle. “The acquisition is intended to be for the long term and for the purpose of deriving income,” said the company in the filing.
For 2QFY2018 ended Dec 31, Lum Chang reported a 32% y-o-y rise in earnings to $7.2 million, on a 38% y-o-y decline in revenue to $60.5 million. According to the company, private sector construction activity has been relatively weak, shrinking 8.5% y-o-y for the quarter. However, there appears to be a healthy pipeline of public sector construction projects that could benefit the company. The Building and Construction Authority forecasts between $26 billion and $31 billion in construction contracts to be awarded this year. Lum Chang also reported its total outstanding value of construction projects in progress was $625.2 million.
Han Seng Juan, the controlling shareholder of Centurion Corp, has upped his stake in the company with purchases of 726,000 shares at HK$3 a share on March 7 and 200,000 shares at HK$3.02 apiece on March 9. Following these purchases, Han now has a direct and deemed interest of 466.6 million shares, which is equivalent to a 55.5% stake in the company.
In December, Centurion obtained dual listing on the Hong Kong Stock Exchange. It raised about HK$69.7 million ($11.6 million) in conjunction with the listing. Both the placement and public offer portions of the share sale were oversubscribed. Of the net proceeds, about HK$62.7 million will be used for the development of a new 280-bed student accommodation in Adelaide, Australia. The remaining HK$7 million will be used for general working capital.
Centurion has also closed its first private fund, the Centurion US Student Housing Fund, with an aggregate committed capital of US$89.5 million ($117.2 million). The fund will be used to acquire six student accommodation assets in the US. The assets are located in Connecticut, Florida, Alabama, Texas and Wisconsin, and will cater to first-tier universities. These assets will be earnings-accretive immediately.
“The Centurion US Student Housing Fund spells a significant moment for our business, both in terms of geographic diversification and the shape of the group’s growth going forward. This is the culmination of our strategic planning since 2015 and enables our continued fast-paced expansion with an asset-light strategy,” says Centurion CEO Kong Chee Min in a statement.
Meanwhile in Singapore, the lease on a workers’ dormitory at 90 Tuas South Avenue 9 has run out. In November, the company said it was making arrangements to move affected workers to other dormitories. The lease was originally supposed to expire on April 30, 2017, but the company obtained a nine-month extension from the authorities. “With no further extension, the group will no longer have the benefit of generating additional revenue from Westlite Tuas,” said Centurion in a statement.
However, this will be offset by a new dormitory with an integrated training centre that opened on Jan 5. The ASPRI-Westlite Dormitory — Papan is a 7,900-bed facility that has already achieved almost 100% occupancy. The training centre offers subsidised courses for foreign workers in subjects such as IT and literacy, workplace safety and health, teamwork, quality and productivity as well as technical skills.
For FY2017 ended Dec 31, Centurion reported an 11% rise in earnings to $31.7 million, on the back of a 14% increase in revenue to $137.1 million. The strong results were owing to the improved performance of the company’s worker accommodation assets in Singapore and Malaysia, as well as contribution from four student accommodation assets in the UK that were acquired in mid-2016. The information in Insider Moves is provided as a service to readers. The explanations fi led are at times abridged, indirect interest dec larations summarised
