Oxley Holding

Kevin Scully have a great acticle on Oxley Holding coupled by insider buying 748,000 shares yesterday at 0.342  
www.nracapital.com/NetResearchV4/Researc...log.aspx?blog_no=614
The most important statement in the Q2-2011 results were its statement on project sales.  Oxley stated the following: To-date the Group has launched seven projects namely, Suites @ Katong (100% sold), Parc Somme (100% sold), Loft @ Rangoon (100% sold), Viva Vista (100% sold), RV Point (96% sold), Loft @Holland (100% sold) and Vibes @ Kovan (63% sold).The S$5.9mn revenue in Q2 came from partial recognition of Parc Somme, Loft @ Rangoon and Suites @ Katong of between 4% to 12%. We etimate that total revenue from what has been sold so far is more than S$320mn to be recognised over the next two to three years with profit margin of about 40-50% or between S$120-150mn.  Oxley recognises the income and profit from its development projects based on percentage of completion which in turn is based on level of construction.   My estimate is 20% for FYE June 2011, 60% for FYE June 2012 and the balance in FYE June 2013.  This works out to revenue of between S$60-70mn for FYE June 2011 with net profit of S$30-40mn.......but only from these seven projects.  
 
www.nracapital.com/NetResearchV4/Researc...log.aspx?blog_no=612
The Best Case ScenarioIf they can sell the proposed Q1-2011 launches well and if the numbers for 138 Robinson Road are along the lines of the transactions above, Oxley could surprisingly generate a profit stream of $700-900mn over the next four to five years which would boost its forward RNAV to S$800-900mn.   This is forward as the company only recognizes profit on progressive completion. So in the best case scenario of where the Q1-2011 launches proceed as planned and they announce the launch of 138 Robinson Road – we are looking at a future RNAV of S$900mn or about S$0.62 per share (a 67% premium to the current share price).  To be conservative, we have discounted this future income to the present day using a discount rate of 8% to give a present value RNAV of S$0.51 (upside of about 38%). The company has also committed to pay 50% of earnings in 2011 as a dividend followed by 30% for 2012 earnings and 20% for 2013 earnings.   Assuming net profit of about S$50-60mn for the FYE June 30, 2011, investors would be looking at a running yield of about 5%

I agree that Oxley is worth putting on one's radar screen, and to commence indepth study. The persistent insider buying is very encouraging.

The CEO is a regular buyer of Oxley shares. Am tempted. What do you all think? Now 36.5 cents, have withstood bombardment in recent market upheaval