SINGAPORE (Feb 21): Neo Kah Kiat, chairman and CEO of caterer Neo Group, bought 5.2 million shares via a married deal on Feb 13. He paid a total of $1.56 million, which works out to 30 cents per share – a significant discount to Neo Group’s closing price of 46 cents on the same day.
The identity of the seller was not disclosed. With this purchase, Neo now owns about 106.3 million shares directly, or about 72.2% of the company, up from 68.6% prior to this married deal.
His wife Liew Oi Peng also holds some 8.1 million shares of her own. This means Neo’s total stake in the company, consisting of both direct and deemed shares, has increased from 74.1% to 77.6%.
This married deal took place just one day after Neo Group announced its 3QFY2020 earnings for ended Dec 31, 2019. The company’s 3QFY2020 revenue also doubled to $3.5 million from a year ago. Revenue in the same period was $50.8 million, up 2.7% y-o-y.
The improvement in its earnings for 9MFY2020 ended Dec 31, 2019, was even more pronounced. The company increased its revenue by 9.1% y-o-y to $141.9 million, up its bottomline nearly quadrupled y-o-y to $5.8 million.
Besides catering for company functions, Neo Group has generated “sturdy demand” from the provision of food on a recurring basis to childcare and eldercare markets. The tingkat or home delivery segment continued to contribute to growth too.
Apart from these, the company has spent the past few years acquiring or developing complementary earnings streams, including the manufacturing of foodstuff. “For resilient growth, we will continue to build up our diversified revenue streams across four key business segments,” says Neo.
“Food manufacturing, our second largest revenue driver, has continued to make good headway in the strengthening of its brand name through the introduction of new products and the opening of new markets overseas,” he adds.
The Ong family, who controls Lian Ben Group via the family vehicle Ong Sek Chong & Sons, has been scooping up shares from the open market. On Feb 14, they bought 10,000 shares at 50 cents each. Earlier in February, they bought a total of 240,300 shares — all at between 49 and 50 cents each. The purchase price was made at a very significant discount to its book value. As at Nov 30, 2019, its net asset value was 141.41 cents, up from 138.90 cents as at May 31, 2019.
Lian Beng’s Ong family
Ong Sek Chong & Sons, as of Feb 14, holds a direct stake of some 95.2 million shares, up from 95.1 million shares. The entity holds another 55 million shares via nominee accounts, thus, giving it a total stake of 150.2 million units, or 30.06%.
Ong Pang Aik, Lian Beng’s executive chairman and managing director, holds a separate personal stake of 28.3 million shares.
This gives him a total stake of 178.5 million shares, or 35.73%. His sister, Ong Lay Huan, one of the company’s executive directors, holds her own stake of some 16 million shares, giving her a total stake of 166.2 million shares, or 33.27%.
On Jan 13, the company reported that earnings for 2QFY2020 ended Nov 30, 2019, increased by 51.1% y-o-y to $11.2 million. Revenue in the same period doubled to $164.7 million. The improvements were driven by both its construction and property development segments.
“Lian Beng has delivered a healthy set of results amid a competitive industry landscape, and are looking forward to building on this momentum,” says Ong, the chairman.
Last December, the company won a $178-million contract via its 60%-owned subsidiary, United Tec Construction, to construct a 640-unit private residential development at Clementi Avenue 1.
With this latest order, Lian Beng has won a total of four contracts worth a total of $693 million since the start of FY2020 ended Dec 31, 2020. Its total order book has increased to $1.6 billion.
Looking ahead, Lian Beng is cautiously optimistic of the outlook of the construction industry, with both public sector infrastructure projects, and private property construction projects, keeping the industry occupied.