What Investors Should Know About Rowsley Limited’s Latest Earnings and the Future
Rowsley Limited (SGX: A50) is a real estate firm with businesses in design and engineering, real estate development and hospitality.
The company announced its financial results for the full year ended 31 December 2017 earlier in the month. We will look at two main aspects of the announcement here.
Show me the money
Revenue for 2017 tumbled 9% year-on-year to S$93.9 million. The fall was largely on the back of a significant slowdown in Singapore’s private sector building development, partially offset by strong growth in revenues from its overseas subsidiaries, and full-year contributions from Squire Mech and AC Consortium.
Squire Mech, a mechanical and electrical engineering consultancy, became a wholly-owned subsidiary of Rowsley in August 2016, while AC Consortium, an industrial building designer, was acquired in June last year.
Moving down the income statement, Rowsley ended 2017 with a loss of S$56.2 million, as compared to a loss of S$63.3 million in 2016.
Meanwhile, Thomson Medical and TMC Life Sciences Berhad (0101.KL), which Rowsley is looking to get its hand on, posted revenues of S$150.5 million and S$50.6 million respectively, with profit after tax at S$31.7 million and S$8.7 million.
As at 31 December 2017, Rowsley had S$23.3 million in cash and cash equivalents, and total debt of S$121.3 million. In comparison, at the end of 2016, it had S$37.6 million in cash balance and total borrowings of just S$12.5 million.
What the future holds?
Rowsley will be holding an extraordinary general meeting on 23 March 2018 for the proposed acquisition of the 100% stake in Thomson Medical Pte Ltd and 70.36% stake in TMC Life Sciences Berhad from Peter Lim, among others.
Tan Wee Tuck, executive director and chief executive of Rowsley, commented on the purchase:
“Upon completion, we will become a leading healthcare player in Southeast Asia. This will help us capture the growing demand for quality healthcare in this region.”
The following shows Rowsley’s market capitalisation post-acquisition, which is set to go above S$2 billion from S$537 million, as at 15 February 2018:
Source: Rowsley Limited’s 2017 earnings presentation
Investors who are looking to invest in the healthcare space will have another company for consideration after the acquisition is approved and completed.