Kingsmen Creatives AGM Review

Kingsmen Creatives AGM

Not only was this the first time I was attending a Kingsmen Creatives AGM, it was the first time I was attending any AGM ever!  (The Kingsmen Creatives AGM was held at 3 Changi South Lane at 10.30am on the 28 May 2016.)

 

I must admit that I refrained from going to AGMs because of the horror stories I’ve heard about uncles and aunties fighting over free buffet spreads.  The Kingsmen AGM remained classy (thankfully).  It was great to make new friends at the Kingsmen Creatives AGM and also meet prominent local blogger, Brian, who blogs at – A Path to Forever Financial Freedom. He has covered the Kingsmen AGM succinctly here.  I will not repeat his points but instead share some personal insights that I’ve gleaned from my virgin AGM.

So here’s what went down that day:

 

I arrived at the Kingsmen headquarters and was directed to a parking lot by the attendants present.  Immediately, I felt like a VIP.

Andrew Cheng, the upcoming CEO of Kingsmen kicked off the meeting by giving a presentation on the myriad of projects the company had done for 2015.  He also unveiled some of the upcoming projects that Kingsmen will be doing for 2016. He also showed some statistics on some of the available jobs in the region available for Kingsmen to tender, and said that they are looking at each opportunity strategically.

 

Slowdown in Luxury Retail

The management talked about the slowdown in luxury retail which is affecting Kingsmen’s revenues as well.  Most of the high margin jobs involved designing concept stores for luxury retail brands.  However, the management reiterated that despite this slowdown, they still managed to turn in a profit, and continue trudging on.  The lower revenue and earnings this year caused Kingsmen stock to drop from a high of $1 all the way down to $0.60 last year.

 

Other Opportunities

To offset the slowdown in retail, Kingsmen is constantly on the look out for other projects.  That includes designing stores for mid-range retail brands.  The management also emphasised growth opportunities and how they are making further headway into the following areas:

  • MICE ( congress, conferences, exhibitions, trade shows)
  • Museums ( revamping and upgrading)
  • Supporting International Sporting events (Seoul Winter Olympics)
  • Thematic Attractions (Shanghai Disney, Universal Studios Korea, 100 theme parks to be built from now till 2020.)

Benedict Soh, the current chairman, admitted that they are still a “small player” in the theme park industry.  But he is confident that Kingsmen Creatives will build a brand reputation and secure more jobs in the future.

Are the glory days of Kingsmen over?

One shareholder, feeling the pain of Kingsmen falling share price, asked the management if the glory days of Kingsmen over.  An independent director, who is on the board of 5 companies, took up the opportunity to reassure the shareholders.  He talked about how he was at first hesitant to join Kingsmen’s board of directors, thinking that its business was easily replicable.  He though that almost anybody in the yellow pages could set up an events/design company.  However, as time went by, he started to realise that Kingsmen does not just manage events or make simple designs.  It focuses a lot on design work as well.  Its standard, quality of design, and scope of work was not something any mom-and-pop contractor could emulate.  He went on to reveal that Kingsmen is his ‘darling’ company out of the 5 which he sits on the board of directors for.

Benedict Soh, the chairman of Kingsmen Creatives, emphasised strongly on the fact that Kingsmen just happened to ride the luxury retail market during its boom years.  He added that the management had no plans to just solely focus on luxury retail.  Instead, they are expanding their capabilities, and growing their portfolio and experiences in other industries as well.  He stressed that they are not going to just rely on one market segment to bring in the revenue.

 

Talent Acquisition

Later on, when we were having our buffet lunch, the chairman wandered over to our table for a chit-chat.  I asked him about the talent acquisition and retention process in Kingsmen.  He mentioned that he is in a tie-up with our government to provide scholarships to promising individuals, after which, these individuals have to come and work at Kingsmen for 4 years.  He also mentioned about giving employees a proper career path, more responsibilities, overseas job opportunities to make their work more fulfilling and satisfying.

I asked how they poach existing talent in the industry.  He gave a disgusted look and said, “I don’t ‘poach’ talent…But everyone else is trying to poach our staff!”

He then went on to mention about a system of proper remuneration and career paths for everyone.

 

Final Thoughts on the Kingsmen AGM

I am extremely impressed by the candor and friendliness the management display towards shareholders.  I also like how the management talks about adopting a long-term view of their business.  They are realistic, practical and confident in pushing the business forward.  The accept the realities of a slowing luxury industry, and are making plans to further entrench their positions in other industries.  I also got to have a better understanding of Kingsmen’s job scope and see some of their completed projects. And I must say, they are definitely not your run-of-the-mill event organisers or contractors.

Even though the management instills confidence in me, I am wary of project-oriented industries.  Businesses in such industries have to constantly fight for projects in order to bring in the revenue.  (This is a slight deviation from my preference of businesses that have chance to scale and compound their value in a sustainable manner.)  Nevertheless, the management’s strategy and the company’s resiliency is something that I admire.  Furthermore, their dividend payout ratio of around 30-40% is sustainable and consistent.

I will be looking to buy a little more Kingsmen Creatives shares within the range of $0.60-$0.70.

 

*update – Heck, I just bought a bit more at $0.71

 

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4 Comments

  1. shouyi

    Are you concerned abt the Q1 loss suffered by Kingsmen in FY2016 ?

    Reply
    1. Jerry (Post author)

      Hi Shouyi,

      Yes I am mildly concerned. It seems like their woes with their luxury retail business will not be over so soon. ( Almost every business will face headwinds at one point in time or another.) I am still holding on to the stock.

      Reply
      1. Yohan

        why didn’t you wait till the Q1 results are out before going in with your latest purchase?

        Reply
  2. Pingback: Singapore-Style Annual General Meeting (AGM) • Heartland Boy

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