"Rock" contributed this article, which builds on his earlier forum post, to NextInsight

tix4.15Tourists at Singapore Flyer. NextInsight file photo
When the news emerged in 2014 of Straco Corp buying over Singapore Flyer, Straco shares were sold down from 83.5 cents to as low as 72 cents.


The question on many shareholders' mind: Will Singapore Flyer be profitable or a liability to the company? 

Time has proved that buying Singapore Flyer was a wise move.

Mr Wu Hsioh Kwang, Straco's founder and executive chairman and his team, through years of experience have developed plans and calculated all the risks in order to land this spectacular deal.

Straco has turned around Singapore Flyer and made it profitable from day one.

netcash8.17Before buying over 90% of Singapore Flyer, Straco was debt-free.

After that, Straco's total debt stood at $93.3 million while it held $112.5 million cash. It was still in a net cash position of $19.1 million. 

Today, about 2.5 years later, Straco has used its strong operating cashflow to pare down its borrowings.

Total debt decreased by $37.6m. In 2.5 years Straco debt had reduced by 40%. 

The outstanding amount decreased from $93.3m to $55.9m.

Straco's net cash shot up from $19.1m to $$103.6m. Total net cash increased = $84.5m. 

In 2.5 years net cash had increased by 442% -- and it had continued to pay dividends and it did some share buyback. 

 

$’000

2012

2013

2014

2015

2016

1H2017

Dividend (to owners)

6.5

10.5

17.0

17.2

21.5

21.5

Dividend (to minority owners)

0.4

1.3

1.3

1.2

1.6

1.7

Share buyback

4.6

0.1

0.6

4.2

0.5

0.0


With so much cash in hand, Straco is capable of doing another fruitful M&A deal.


Straco has proven to be truly a cash-generating machine and I will be holding on to this stock for as long as the company continues to generate rich cash.


Share Prices

Counter NameLastChange
AEM Holdings3.6600.070
AusGroup0.022-0.001
Avi-Tech Electronics0.420-
Best World Int.1.360-
CEI0.885-
China Sunsine0.3500.005
CNMC GoldMine0.2800.010
CSE Global0.485-
Food Empire0.585-0.010
Golden Energy0.1650.003
GSS Energy0.056-0.001
ISDN Holdings0.3800.010
ISOTeam0.142-
IX Biopharma0.220-
JB Foods0.555-
KSH Holdings0.3400.015
Medtecs Intl1.070-0.110
Moya Asia0.064-0.002
Nordic Group0.2100.010
Oxley Holdings0.215-
Procurri0.3400.005
REX International0.1560.003
Riverstone3.4000.120
Roxy-Pacific0.320-0.005
Sing Holdings0.375-
SingMedical0.250-
Straco Corp.0.500-
Sunningdale Tech1.5100.060
Sunpower Group0.5500.015
The Trendlines0.0890.004
Tiong Seng0.1430.003
Uni-Asia Group0.4250.010
Yangzijiang Shipbldg1.000-

NextInsight RSS

rss_2 NextInsight - Latest News

Online Now

We have 4158 guests and no members online