The services industry faced significant challenges during the pandemic. This publication has previously explored the impact on the nation’s cinema business and live concerts. However, one unique Singapore-listed company has bucked the trend and is now on stronger footing than ever.
SUTL Enterprise develops and operates marinas and provides marina consultancy, development and yacht chartering services. It owns ONE°15 Marina Sentosa Cove in Singapore, which was established in 2007; and operates ONE°15 Luxury Yachting, which provides yacht chartering services at the club.
Beyond Singapore, SUTL generates revenue by offering consulting and management services for third-party-owned marinas in China and Indonesia under the ONE°15 brand.
Its profits have consistently increased, demonstrating an upward trend since 1HFY2020. Net profit rose 28% y-o-y to $3.2 million in the fiscal year ending December 2020 and increased 25% to $4.5 million in FY2021.
The following year, SUTL saw net profits surge 80% y-o-y to $8.1 million, attributed to “higher banquet, food and beverage, chartering, room and marina income”.
FY2022 revenue grew 20% y-o-y to $38.1 million, but SUTL’s two main segments fared differently.
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A 35% rise in sales of goods and services to $27.5 million during the year “more than offset” an 8% y-o-y decline in membership-related fees and management fees to $10.6 million.
SUTL’s resilience throughout the pandemic can be attributed to a series of key factors, says Arthur Tay, chief executive of SUTL Enterprise. “Our unwavering focus on the marina business played a pivotal role, with a noticeable surge in boating enthusiasts leading to an increased presence of super-yachts.”
Tay, who is also executive director, highlights a “strategic reconfiguration” of the Sentosa marina, “specifically tailored” to accommodate larger vessels.“This proactive adjustment amplified our revenue streams and heightened interest in our marina offerings.”
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He points to a “surge” in interest surrounding club memberships and “yacht-cations”, mirroring “the evolving preferences of consumers”.
Stable earnings
In the latest 1HFY2023, SUTL sustained its growth. The company reported a net profit of $4.8 million for the six months ending June 2023, marking a 26% y-o-y increase.
Total revenue grew 9% y-o-y, reaching $19.6 million, driven by increased income from banquets, chartering, rooms and marina services.
Despite high operating expenses, including increased labour and maintenance costs, total expenses grew by 8% y-o-y.
Meanwhile, membership-related and management fees shrank slightly by 1% y-o-y to some $5.2 million in 1HFY2023.
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For context, recent listings on the reselling platform Carousell price a lifetime membership with ONE°15 at $13,000 and at least two sellers say they paid an entrance fee of $60,800.
SUTL’s share price has appreciated in line with the stable earnings. As of Jan 2, its shares have risen 34% over the year.
The company typically pays dividends at the end of each financial year. SUTL paid a final dividend of 2 cents per share in FY2019, which amounted to 70% of its $2.5 million net attributable profit that year.
The payout remained unchanged in FY2020, amounting to a payout ratio of 54%.
In 1HFY2021, SUTL paid a special interim dividend of 10 cents per share in “a show of business confidence” after net profit surged 84% y-o-y with the “careful resumption of lifestyle activities in accordance with Covid-19 restrictions”.
Taken together with a final dividend of 2 cents per share, SUTL’s FY2021 payout of 12 cents per share represented 210% of net attributable profit that year.
This normalised in FY2022, with a first and final dividend of 5 cents per share representing 57.2% of net attributable profit that year.
Higher dividends
At 5 cents per share, SUTL’s dividend yield is above 7%. Could FY2023 and beyond bring about even higher earnings and, thereby, higher dividends?
For one, SUTL generated net cash of $4.7 million from its operations in 1HFY2023, up from $3.8 million in 1HFY2022.
In July, SUTL sold its assets at ONE°15 Estuari Sports Centre to its joint venture partner UEM Land.
Four months later, the company announced on Nov 20 plans to dispose of a Johor Bahru property for RM11.5 million ($3.2 million). The freehold land site measuring approximately 4,941.3 sq m had been earmarked for the cancelled ONE°15 Marina Puteri Harbour.
In February 2022, the membership scheme for the yacht club Puteri Harbour Club was terminated. As the property had been intended only for Puteri Harbour Club, SUTL’s subsidiary Sarandra Malaysia sold the property, ending plans for a dual membership with the ONE°15 Estuari Sports Centre.
Based on its latest valuation as of Oct 27, 2021, the property was valued at RM10 million. As of June 30, the book value of the property was approximately $2.89 million. Given the purchase consideration, SUTL’s gain on disposal stands at approximately $433,000.
With the sale, SUTL expects to wind down all operations in Malaysia by the end of the year.
“The group continues to actively seek opportunities in the Asia-Pacific region to grow its business through developing new integrated marinas, acquiring existing marinas and managing third-party-owned marinas,” says SUTL in its 1HFY2023 results.
According to management’s responses at its April AGM, this could include marina consultancy projects in Ho Chi Minh City and Phu Quoc Island in Vietnam and Bali in Indonesia.
Pivotal moments
SUTL has seen more pivots than most family-owned businesses. Tay’s father, the late Tay Choon Hye, founded SUTL as a ship chandelling and trading company in 1968.
From just 20 people, the company today has a headcount of more than 5,000. In 1990, SUTL diversified into lifestyle and leisure.
By 1996, it introduced Vietnam’s inaugural “multi-recreational shopping centre,” Saigon Superbowl. SUTL secured the KFC franchise the following year and launched Vietnam’s first fast-food restaurant.
SUTL went public in 2000 under its former name, Achieva, an IT peripherals business.
In the following years, the technology sector saw “fierce competition, narrow profit margins and products prone to rapid obsolescence”, adds Tay. As Achieva’s operations were “no longer aligned” with the “evolving business vision”, a decision was made to shift toward a more promising sector.
ONE°15 Marina Sentosa Cove opened in 2007. With multiple businesses under the group, Tay injected the marina business into the listed company in 2015.
That June, Achieva’s shareholders approved the $21 million acquisition of SUTL Marina Development and ONE°15 Luxury Yachting from directors Arthur Tay and Peter Tay. The latter, who served as the project director of the Sentosa Cove marina, continues to be a non-executive director of SUTL today.
“This strategic integration harmonised our marina operations under a unified entity, setting the stage for an even brighter future,” says Tay.
SUTL’s F&B ventures at the marina were promising, as seen by the brisk business at WOK°15 Kitchen, the Chinese restaurant and Boaters Bar, Singapore’s only floating bar. Both establishments are still active today.
He adds that the company continues to invest in developing and managing marinas here and abroad. “Some of the marinas include the ONE°15 Marina Brooklyn, [opened in 2019] and the recently launched ONE°15 Marina Nirup Island Indonesia, [opened in July].”
Tay sees “substantial” potential within Singapore’s super-yacht community, with the luxury asset viewed as a step up from simply acquiring multiple properties. At least one crypto baron is known to keep a yacht here.
SUTL is tapping into this trend. “Singapore grapples with a shortage of berths and facilities specifically tailored to accommodate larger yachts and super-yachts,” says Tay. “To bridge this gap, we are proactively investing in marina expansion and enhancing our facilities, with a particular focus on the ONE°15 Marina Nirup Island, aimed at providing improved berthing options for larger vessels.”
ONE°15 Marina Sentosa Cove features 272 wet berths, including 32 designed for mega-yachts and an additional 60 dry berths. “The [Indonesia] expansion aligns seamlessly with our unwavering commitment to positioning Singapore as the foremost yachting destination in Asia. Our ultimate aim is to furnish super-yacht owners and enthusiasts with world-class amenities and services, elevating their yachting experience within the region to new heights.”
New initiatives
As an avid diver and yachting enthusiast, Tay has witnessed the “distressing degradation” of oceans.
He launched the inaugural Blue Water EduFest in 2022, and this year’s edition in November featured a two-day conference named The Ocean Collective Summit. SUTL has allocated $250,000 to support various initiatives at local universities.
These include a three-year marine sustainability scholarship programme for low-income students, a five-year coral and marine biodiversity conservation project at ONE°15 Marina Nirup Island off Batam and seed funding for early-career marine science researchers over three years.
Aside from that, SUTL will assume ownership of the Singapore Yachting Festival in 2024. The inaugural edition was launched at ONE°15 Marina Sentosa Cove in April, attracting over 72 companies, 52 yachts and some 10,000 visitors.
“For 2024's edition, we will expand the exhibition area to double the show area to accommodate even more yachting partners and enthusiasts,” says Tay. “We also aim to take advantage of this platform to showcase cutting-edge, sustainable practices and products to the yachting community, conservationists and wider marine community.”
Photos: Albert Chua/The Edge Singapore
