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Kingsmen co-founder Ong raises stake; Japfa in buybacks ahead of subsidiary's planned IPO

The Edge Singapore
The Edge Singapore11/16/2022 01:39 PM GMT+08  • 3 min read
Kingsmen co-founder Ong raises stake; Japfa in buybacks ahead of subsidiary's planned IPO
Ong, deputy chairman of Kingsmen Creatives, co-founded the company with chairman Benedict Soh back in 1976 / Photo: The Edge Singapore
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A fter a break of about 20 months, Simon Ong, deputy chairman of Kingsmen Creatives, has bought shares again.

On Nov 9, Ong, one of the two co-founders and controlling shareholders of the company, acquired 200,000 shares from the open market at 23.5 cents each. As he has a deemed stake of nearly 38 million shares, this gives him a total interest of just over 47 million shares, equivalent to 23.29%.

Ong last bought Kingsmen shares more than a year ago although this was via a married deal that also involves fellow co-founder cum chairman Benedict Soh. On March 2, 2021, Ong and Soh acquired 500,000 shares each for 24 cents per share. This brought the stakes of Soh and Ong to just over 47 million shares or 23.29% and 46.8 million shares or 23.19% respectively.

Meanwhile, Kingsmen’s group CEO Andrew Cheng also made purchases at the same time, acquiring one million shares at 24 cents. Cheng now holds 1.66 million shares in total or a 0.82% stake.

Kingsmen’s specialises in designing and fitting out interiors of showrooms, retail shops, exhibition booths, theme parks and special attractions. Its clients range from retailers to museums. Some of the projects and events handled by the company include the Formula One races here.

Unsurprisingly, its business suffered during the pandemic years. In pre-pandemic FY2019 ended December 2019, Kingsmen reported earnings of $0.5 million. It sank into a loss of $11.1 million in FY2020 but managed earnings of $1 million in FY2021.

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On Aug 11, the company reported a loss of $1.5 million in 1HFY2022, narrowing from the loss of $1.7 million in 1HFY2021. Revenue was up 4.5% y-o-y to $122.4 million.

In his earnings commentary, group CEO Cheng says Kingsmen is not out of the woods but has seen a discernible pickup in the volume of work while the second half of the year is expected to be “strong”.

According to Cheng, the company’s exhibition and events business is seeing a recovery, with more shows back on the calendar and new ones being planned. Niche and branded popup, activation and engagement events as well as sporting events have bounced back strongly and Kingsmen is fielding more enquiries.

See also: Jumbo and Thakral in the buyback spotlight

As at July 31, Kingsmen has an order book of $284 million, with $247 million to be fulfilled in the current FY2022. “Our core business remains robust and we are seeing many more projects confirmed and coming onstream,” says Cheng

Buybacks ahead of restructuring

Japfa, which rears chickens, pigs and dairy cows for protein, has been steadily buying back shares thus far this month, ahead of a major restructuring.

The most recent buyback was on Nov 16, when Japfa acquired 52,700 shares on the open market at between 50.5 and 51 cents each. This brings the cumulative shares bought back under the current mandate to around 5.94 million shares. The company had earlier paid between 47 cents and 50.5 cents when it bought back shares on days including Nov 9, 10, 11, 14 and 15.

At an EGM on Nov 7, Japfa shareholders voted overwhelmingly in support of a proposal to distribute shares of its 62.5% subsidiary, AustAsia, ranked as one of the top-five dairy farm operators in China.

Besides Japfa, other Aust-Asia shareholders include Meiji, Chi Forest, Honest Dairy and New Hope Dairy. AustAsia is seeking its own separate listing in Hong Kong, targeted to take place by next March.

For more stories about where money flows, click here for Capital Section

According to Japfa, AustAsia’s listing will give it the flexibility to tap the capital markets directly. Japfa can then focus its financial resources on the remaining animal protein businesses. Japfa plans to distribute 200 AustAsia shares to its shareholders for every 1,000 shares held.

Japfa notes that while regulatory approvals have been given, there is no certainty that AustAsia’s listing will go ahead, likewise with the share distribution.

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