How Does Singapore Press Holdings Limited Make Money?
It is important to know what a particular company does and how it makes money before investing in it. Investing in a business without such knowledge is akin to travelling to an unknown territory without a map.
On that note, let’s check out what business Singapore Press Holdings Limited (SGX: T39) is involved in and how it generates its revenue.
Let’s take a look at the table below for the revenue contribution of the segments for the financial year ended 31 August 2017 (FY2017):
Source: Singapore Press Holdings Limited Annual Report 2017
The Media segment, which brought in the bulk of total revenue, is involved in the production of content for distribution on print and other media platforms. Some of the newspapers under this segment include The Straits Times, The Business Times, Lianhe Zaobao, Berita Harian and Tamil Murasu.
According to Nielsen Media Index 2016, 2.5 million individuals or 59% of people above 15 years old, read one of SPH’s news publications in print copies or one of its digital platforms on average daily. SPH Data Services, which licenses the use of the Straits Times Index (SGX: ^STI) in partnership with the Singapore Exchange (SGX: S68) and FTSE-Russell Ltd, also falls under the Media segment.
Moving on, the Property segment holds, manages and develops properties. This segment includes a 70% stake in SPH REIT (SGX: SK6U). SPH REIT is a retail real estate investment trust that has interests in Paragon and The Clementi Mall.
Last but not the least, the Others segment include SPH’s businesses and investments in online classifieds, events and exhibitions, healthcare and the New Media Fund.
In April this year, the media giant acquired Orange Valley, which operates nursing homes. SPH intends to “nurture this acquisition to become a major player to cater to the growing demand” for quality aged care services.
Not booked under revenue is Treasury and Investment, which manages the investment activities for the organisation. For FY2017, it raked in S$47 million in profit before tax.
Now that we know the basics of Singapore Press Holdings Limited makes money, we can then delve into other aspects of the firm such as its profitability, strength of its balance sheet, its cash-generating abilities and so on before deciding to invest in it.