The Scuttlebutt Series Part 2: Checking In on Straco Corporation Ltd’s Singapore Flyer
“Scuttlebutt” was a term coined by the late growth investor Philip Fisher when he wrote his seminal 1958 book “Common Stocks and Uncommon Profits.” Warren Buffett has also mentioned that “scuttlebutt” made a deep impression on him and involves simply going out and finding out as much as you can from visual observations and speaking to people.
I visited the Singapore Flyer (on 10 July at around 3 pm), which is 90%-owned by Straco Corporation Ltd (SGX: S85). I’ve written about Straco’s recent annual general meeting, where Chairman Wu Hsioh Kwang shared his thoughts and plans on sprucing up the Flyer to make it a more attractive destination for both locals and tourists. My colleague Sudhan also conducted his own scuttlebutt almost two years ago, so I thought it would be a great time to provide an update.
1. Management mentioned at the AGM that approval for a sheltered walkway connecting Promenade MRT Station to the Flyer had been granted by the Land Transport Authority (LTA). However, I saw no evidence of this being constructed at all, and the pathway that led to the Flyer was still being scorched by the hot midday sun. Fortunately, I did manage to see groups of tourists braving the searing heat to walk from their hotels towards the Flyer.
2. The construction of the Time Capsule attraction is ongoing, and the photo below shows the first level of the podium displaying a new attraction coming soon.
Source: Photo taken by writer
The same section on all three levels of the retail podium was sealed off to construct the new Time Capsule attraction, and I suspect it must take up a significant amount of space. I spoke to a staff member near the Flyer entrance on when the attraction would be ready, but the lady said she did not know.
3. Note that this section which was closed off for the construction used to belong to a sports restaurant and bar, which has been shut for at least two years. The area is close to the main entrance of the Flyer and is also located near the drop-off point for cars, making it fairly visible if one should drive past the Flyer.
4. The adjoining car park area has a link bridge which leads directly to the Flyer, and the open area around the bridge has a ticketing office which has been defunct for the longest time. However, today I saw a man in the ticketing booth cleaning its windows, in an apparent effort to get the ticketing booth ready for service.
Source: Photo taken by writer
This may signal that management expects more locals to drive and park in the multi-storey car park, and for these visitors to purchase tickets directly from this booth before they head on down the bridge towards the Flyer.
5. The retail podium area felt rather bare, as many of the tenants have vacated the premises due to the impending upgrading of the Flyer. Long-term tenant Kenko Spa has shifted out from the premises, and the retail podium’s occupancy rate seems to hover around 50%.
6. There was still a steady stream of tourists who were queueing up to buy tickets to take a ride on the Flyer, despite it being mid-afternoon on a weekday. WTS Travel, which owns 10% of the Flyer, probably has a part to play in providing transportation services for the tourists to arrive at the Flyer.
More changes afoot?
This summarises my simple scuttlebutt on the Flyer, and it seems more changes may be afoot closer to the end of the year when the Time Capsule attraction is supposed to open to the public. It is still early days in terms of expecting a sheltered walkway to be built, or for a total revamp of the Flyer to spruce up its retail podium, but investors can expect management to keep their promises, subject to the LTA and the Singapore Tourism Board’s approvals.
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The information provided is for general information purposes only and is not intended to be personalized investment or financial advice. The Motley Fool Singapore has recommended shares of Straco Corporation Ltd. Motley Fool Singapore contributor Royston Yang owns shares in Straco Corporation Ltd.