FLBHD (5197) : Stocks With Likelihood Of Corporate Exercise: Focus Lumber
Focus Lumber Bhd
Focus Lumber Berhad (Focus) is involved in the manufacturing and sale of plywood, veneer and laminated veneer lumber. The company’s products are used mainly in the home decorating, construction and housing materials industries. Export sales to India, South Korea, Taiwan and the USA comprise 92.5% of total revenue in 2013.
Despite less than favourable market conditions for wood players in the past few years due to sluggish housing markets in the US and Europe, Focus managed to stay profitable and consistently paid dividends.
Turnover for the company was stable between RM120 million to RM148 million from 2010 to 2013, resulting in net profit of between RM 10 million to RM 16 million over the same period. For the first half of 2014, revenue increased 6.4% to RM 75.1 million while net profit rose 35.2% to RM7.6 million.
At RM 1.16, Focus is trading at a slight discount of 10 sen or 8% to its book value of RM 1.26. Its trailing 12-month P/E ratio is low at 7 times. The company has net cash of RM60.7 million as at 30 June 2014, which translates to a significant 58.8 sen per share, or 50.7% of the current share price.
Focus increased its dividends from 6 sen to 8 sen per share in 2013, giving shareholders a generous yield of 6.9%. With its rising cash reserves and growing earnings, it can afford to pay more.
With a large cash pile and many other competitors having taking a beating in recent years, it will be interesting to watch if Focus will look at acquiring weaker competitors at depressed prices. On the other hand, it could also consider returning more cash to shareholders.
http://www.theedgemarkets.com/en/node/169552
Focus Lumber Bhd
Focus Lumber Berhad (Focus) is involved in the manufacturing and sale of plywood, veneer and laminated veneer lumber. The company’s products are used mainly in the home decorating, construction and housing materials industries. Export sales to India, South Korea, Taiwan and the USA comprise 92.5% of total revenue in 2013.
Despite less than favourable market conditions for wood players in the past few years due to sluggish housing markets in the US and Europe, Focus managed to stay profitable and consistently paid dividends.
Turnover for the company was stable between RM120 million to RM148 million from 2010 to 2013, resulting in net profit of between RM 10 million to RM 16 million over the same period. For the first half of 2014, revenue increased 6.4% to RM 75.1 million while net profit rose 35.2% to RM7.6 million.
At RM 1.16, Focus is trading at a slight discount of 10 sen or 8% to its book value of RM 1.26. Its trailing 12-month P/E ratio is low at 7 times. The company has net cash of RM60.7 million as at 30 June 2014, which translates to a significant 58.8 sen per share, or 50.7% of the current share price.
Focus increased its dividends from 6 sen to 8 sen per share in 2013, giving shareholders a generous yield of 6.9%. With its rising cash reserves and growing earnings, it can afford to pay more.
With a large cash pile and many other competitors having taking a beating in recent years, it will be interesting to watch if Focus will look at acquiring weaker competitors at depressed prices. On the other hand, it could also consider returning more cash to shareholders.
http://www.theedgemarkets.com/en/node/169552
