Mohamed Salleh, CEO of Second Chance Properties, has been raising his stake in his company in recent weeks. Most recently, on April 28, he acquired 222,400 shares for 29 cents each, lifting his total interest to 516 million, or 68.63%.
Besides Mohamed, the company has been actively buying back shares too. The most recent transaction was on Feb 23 when it bought back 199,400 shares at 26 cents each. Under the company’s existing share buyback mandate which started on Dec 30, 2020, Second Chance has bought back a total of just over 3.36 million shares, equivalent to 0.4455% of the company’s total.
On March 30, the company reported better earnings for the 1HFY2021 ended Feb 28 of $5 million, up 41.69% from $3.53 million in the year earlier period. Revenue in the same period was up 21.43% y-o-y to $16.4 million.
Second Chance attributes the higher revenue to better sales of its jewellery retail business, where sales increased by $4.98 million to $12.34 million, “possibly because of pent-up demand”, the company says. However, its other retail business, specifically apparel, saw a big drop in sales because of the closure of outlets.
Besides its retail businesses, Second Chance owns a portfolio of investment properties. It invests in the stocks of other companies too. For 1HFY2021, earnings from this securities segment increased to $1.85 million from $0.97 million in the year earlier period.
“The group has recently made substantial investments in listed securities which we intend to hold for the long term. We focus mainly on investments that provide good yields and expect our dividend income from these investments to increase considerably,” the company says.
As at Feb 28, the company’s NAV was 36.02 cents per share, up from 29.23 cents as at Feb 28, 2020.
Strong demand for edible oil
The Cheo family that controls edible oil seller Mewah International has increased their stake in the company. The Cheos, via a vehicle called TC Stone, acquired 642,600 shares from the open market on April 16 at 42.5 cents each.
With the purchase, chairman Cheo Tong Choon @ Lee Tong Choon increased his deemed interest to 720.7 million shares, or 48.03%. On April 22, again, via TC Stone, the Cheos bought another 788,200 shares at 42 cents each from an unnamed seller via a married deal. With the deal, Cheo has a deemed interest of around 721.5 million shares, or 48.08%.
On Feb 26, the company announced significantly improved earnings for FY2020 ended Dec 31, 2020. Revenue for FY2020 increased by 22.3% to US$3.45 billion, thanks to a 5.6% higher sales volume of 4.82 million metric tonnes and 15.8% higher average selling prices of US$714.7 per tonne. As a result, Mewah’s earnings for FY2020 jumped 643.1% to US$86.5 million ($114.6 million) from US$11.6 million recorded for FY2019.
In the company’s earnings commentary, Mewah notes that many countries were trying to stock up and guarantee sufficient internal availability of various agri commodities. The combination of strong demand and tight supply conditions resulted in “robust” refining margins.
“The group’s unique position in the value chain as integrated palm oil player supported by large scale production facilities, well-established brands, strong distribution capabilities, deep market insights, loyal and long-standing customer and supplier base enabled the group to appropriate increased margins and register all-time high operating income,” says Mewah, which describes itself as one of the largest palm oil processors in the world.
The company has declared a final dividend of 0.6 cent per share, which, together with the interim dividend of 0.15 cent per share, make 0.75 cent per share the total payout for FY2020. For FY2019, it had only paid an interim dividend of 0.46 cent.
