LOOKING AT the chart above, one can quickly recognise 2004 as a turning point in Leeden's path of profitability.
That year, Steven Tham, the Chairman & CEO, emerged as a substantial shareholder along with two other directors. Mr Tham now owns about 21% of the company while MD/Chief Operating Officer Kelvin Lee and Executive Director Lim How Boon about 13% in total.
(In recent months, the stock continued to be under accumulation by several other individuals and as well as being the subject of Leeden's share buyback scheme, as reported on www.sgx.com)
Not too long ago, we met him at his office in No.1 Shipyard Road in Jurong, where he shared some insights into how the company has grown.
He and his management had drawn up a five-year plan to transform Leeden (formerly known as Ace Dynamics).
It has since become a profit workhorse as the above chart depicts.
More than $1m profit a month
On Wednesday night (Feb 25), Leeden announced that net profit soared to a record S$13.6 million. Revenue also hit a record of S$157.2 million.
During the year, the Group made several synergistic acquisitions which boosted the Group’s full-year results. Together, they contributed additional S$2.0 million or 15% of the Group’s profit after tax.
The performance was also aided by the buoyant marine and oil & gas sector, which sustained the demand for the Group’s wide range of industrial welding, gas and safety products.
Leeden’s cash and cash equivalents as at 31 December 2008 increased 5% to S$15.9 million. The entire cash provided by pre-tax profit of S$16.8 million was used to increase stocks (by S$17.7 million). Reason: to provide better services and more prompt deliveries to customers.
Leeden, based on a recent closing price of 34.5 cents of its shares, now has a PE ratio of 5.7X which is calculated using FY08’s earnings per share of 6.05 cents.
The stock price is trading close to its net asset value of 35.3 cents a share.
Being a small-cap with a market capitalisation of $60 million, Leeden has not been a high-profile company despite having been listed on the Singapore Exchange since 1975. Its longevity is matched by few companies.
Leeden is hiring!
Its history goes further back as it was incorporated in 1964.
Over the years, the Group has progressed from being a distributor of welding and safety products and a manufacturer and supplier of industrial gases to become a value-added integration specialist for the marine and oil & gas industries.
The Group's customers include major oil and gas companies and contractors, shipbuilding and ship repair yards, and steel and pipeline fabricators across Asia.
The macro-economic environment looks challenging but Mr Tham was unfazed, saying he had plans to deal with it.
Interestingly, he is hiring good people, especially graduates. In an announcement on Wednesday, Leeden said it intended to increase its current team of approximately 200 sales & technical product executives and management team by another 10% within the next 6 months.
And if the marine sector is slowing down, Leeden is targeting other industries for growth, such as infrastructure, which is enjoying strong support from government projects.
Leeden’s full results announcement can be viewed at the SGX website.
