Understanding a Niche and Diversified Property Developer using 4 Financial Metrics

• Oxley's FY2020 revenue surged by 79.7%

• Highly leveraged across the years

• Mr. Ching Chiat Kwong is the largest shareholder

• Special dividend to celebrate the 10th year anniversary

Oxley Holdings Limited (“Oxley”) is a home-grown property developer with a diversified portfolio including property development, property investment and project management. The Group currently has a business presence across eleven geographical markets including Singapore, the United Kingdom (“UK”), Ireland, Cambodia, Malaysia, Indonesia, China, and Myanmar.

Since Oxley’s incorporation in March 2010, the Group has launched a portfolio of 48 projects, and completed 33 projects. The current on-going projects include a waterfront township development in London, UK, two mixed-use developments in Phnom Penh, Cambodia, and the largest mixed-use development in the business district of Dublin, Ireland.

Evaluating Oxley Holdings Limited using 4 Financial Metrics

Revenue & Net Profit

For FY2020, Oxley’s revenue (depicted by the blue bar) surged by 79.7% year-on-year to S$1.23 billion. The surge can be seen from the higher revenue achieved from the development projects in Cambodia, the United Kingdom and Singapore, in addition to a new 9-month revenue contribution from a wholly owned subsidiary in Australia.

Despite the higher revenue, Oxley slipped into a S$275 million worth of losses (Purple Bar) for FY2020 as compared to a profit of S$144.1 million in FY2019. The losses incurred are due to:

• Fair value loss of S$48.7 million on its investment properties as a result of COVID-19 pandemic

• Non-recurring losses of S$210.7 million on the disposal of investment in Galliard Group

• Unrealised foreign exchange losses of $23.7 million as a result of the appreciation of US dollar against Singapore dollar.

Leverage Ratio

Oxley is highly leveraged, as seem from its high net debt to equity ratio through the years.

For FY2017, its ratio stands at 1.96 times and has risen by more than 28% to 2.52 times in FY2020. This shows that Oxley’s management has been aggressively using debt financing for its development projects. It could be detrimental to the firm if they could not meet its debt obligations.

With the high level of debts, Oxley’s interest coverage ratio has also suffered a decline as a result of higher finance cost and lower profits. For FY2017, its ratio stands at 8.13 times and has slipped into negative territory due to the losses incurred in FY2020.

Ownership

The Single largest shareholder for Oxley belongs to Mr. Ching Chiat Kwong, who is the current Executive Chairman & CEO of Oxley. He holds a 42.2% stake in the company and the stake is worth S$394 million

The next largest shareholder belongs to Mr. Lee See Ching, who is the current Executive Director & Deputy CEO of Oxley. He has a 28.0% stake in Oxley and the stake is worth S$262 million.

Dividend

Oxley’s total dividend per share remains at 1.5 Singapore cents (Green Bar), for both FY2017 and FY2018. However, due to the reduction in profits, Oxley’s total dividend per share reduced by 33% to 1 Singapore cents in FY2019.

The dividend payout ratio for the 3 years hovers between 20.1% and 27.9%. This indicates that the management is more inclined towards keeping majority of its cash resources for the company.

Even as Oxley registered a loss in FY2020, the company paid out a gross dividend of 0.82 Singapore cents per share and a special dividend (Red Bar) of 1 Singapore cents per share, in celebration of the 10th anniversary of the incorporation of Oxley.

Conclusion and Prospects

Despite registering a strong revenue growth for FY2020, Oxley has slipped into the red mainly due to the losses incurred from the disposal of stakes in Galliard Group, fair value loss and unrealised foreign exchange loss. However, investors could take comfort from the fact that the management has provided dividend payout for FY2020 despite suffering from the losses.

Lastly, investors should take notice of Oxley’s balance sheet and financial health especially during these unprecedented times as the company has a track record of being a highly leverage property developer.

Oxley’s Executive Chairman and CEO, Mr. Ching Chiat Kwong mentioned, "The COVID-19 is a global pandemic that has disrupted businesses and lifestyle in and all around the world. In Singapore, the government has announced approximately $93 billion (16% of 2019 GDP) of support schemes to assist local businesses and employees during this challenging time.

Oxley has rapidly adjusted to the new COVID-19 landscape and the Group’s operations have resumed. As the external environment will be fluid, the Group will adopt appropriate measures to minimize disruptions to the Group’s business activities, complete all projects expeditiously so that revenue and cash flows can continue to flow into the Group.”

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