5. Last but not least, revenue from Singapore river tour and taxi services increased 425% and grew from a sector contributing 2.6% of GYP's revenue to almost 15.4%. Of all the segments, this one is the most interesting to me as this is one of the "non-core" investments which GYP has diversified into.
Looking at the results from FY2013 to FY2014, I think this segment is quite promising and it may indicate that the diversification strategy of GYP is paying dividends though I must also mention that river tour and taxi services may be a cyclical business as it depends mainly on tourists.
GYP's bumboat river tour services 13 landing points along its route, and passes major tourist attractions that include Clarke Quay, the Raffles Landing Site, the Merlion, Marina Bay Sands and the Singapore Flyer. Photo: Company
In summary, the two main revenue drivers of GYP (sale of advertising space and the provision of call centre related services) have declined, hence I think GYP needs to work on these two drivers.
There is good growth in the provision of advertising and IT related services and I think GYP should continue to grow this revenue pie. And as we can see, the revenue from sale of directories has the smallest share of GYP's revenue pie while diversification strategies of GYP have produced results in theSingaporeriver tour and taxi services.
On this last note, I believe in GYP's diversification strategy to grow its revenue pie though I personally think that defensive businesses should be favored.
In terms of cash-flow, GYP had positive cashflows in FY2013 and FY2014 and the stock is currently trading at 0.546 (price to book) and around 11.2 (price to earnings).
The current stock price of GYP seems to me to be a good entry point to gain exposure into a company trading at good valuations, below book value and is transforming via its diversification strategies into a possibly exciting company.
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