Singapore Press Holdings (SPH) has announced it will undergo a strategic review to consider options to “unlock and maximise long term shareholder value”, with Credit Suisse appointed as financial adviser.
"While SPH’s media business continues to face a challenging operating environment and outlook, the Board of Directors believes that SPH remains undervalued and the objective of the strategic review is to unlock and maximise long term shareholder value," SPH says.
SPH is reportedly mulling a separate listing of its student accommodation assets as a REIT, which will be SPH's second REIT.
In its announcement, SPH, citing the Newspaper and Printing Presses Act, reminds investors that without the approval of the Minister for Communication and Information, no person can become a substantial shareholder of SPH, or enter into any agreement or arrangement to act together with other parties to hold more than 5% of SPH shares.
The announcement comes after the company posted a 26.1% y-o-y growth in earnings to $97.9 million for the 1HFY2021 ended February, compared to earnings of $77.6 million in the corresponding period the year before.
This translates to earnings per share (EPS) of 5 cents for the period, compared to 4 cents for 1HFY2020.
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Total revenue for the 1HFY2021 fell 4.2% y-o-y to $460.3 million.
SEE:SPH acquires 7 UK student accommodation properties for $806 mil
Operating revenue fell 11.5% y-o-y to $417.1 million, largely due to declining advertisement revenues for its media business, which fell by $46.5 million or 27.9% y-o-y.
The drop in media revenue was offset by SPH’s non-media businesses, with retail and commercial revenue growing 4.4% or $6.5 million y-o-y to $164.5 million, while SPH’s purpose-built student accommodation (PBSA) grew by 24.2% or $6.9 million to $35.3 million, mainly due to the Student Castle portfolio which was acquired in December 2019.
SPH’s other operating income also increased due to a $15 million grant from the Jobs Support Scheme.
Total costs for the period stood 9.8% lower y-o-y at $340.5 million. SPH attributes this mainly to lower materials, production and distribution costs which fell 40.9% or $23.9 million with the decline in revenue from media and exhibitions. SPH says a lower headcount also reduced staff costs by 4.6% or $7.7 million to $158.0 million.
In addition, SPH’s net income from investments surged by 175.6% or $13.3 million to $20.9 million due to higher dividend income from treasury investments, while share of results and associates increased by 80.9% or $2 million to $4.5 million, largely due to the Woodleigh development.
SPH has declared an interim dividend of 3 cents per share, double compared to 1.5 cents per share declared in 1HFY2020.
As of end-February, cash and cash equivalents stood at $959.5 million.
Ng Yat Chung, CEO of SPH says that the operating performance of the company’s non-media business segments has improved as the economy recovers gradually.
“Despite expanding our audience reach, our media business continues to be affected by the structural decline in advertising and the impact of Covid-19. We will continue our digital transformation strategy and efforts to place media on a more sustainable footing,” he says.
Shares in SPH closed flat at $1.50 on March 30.
