Friday 27 October 2017

ISOTeam AGM 2017

ISOTeam's AGM is held at Sheraton Towers this year. 

The room size is about 100 seating and from my observation about 80% seated.

The AGM started with the usual Q&A and taking the questions are the chairman, CEO and the CFO.

In all only three persons, including myself asked questions. Listed as follows are the Q&A as far as I can remember. Probably have missed couple of them due to my forgetfulness. Was listening intently to the replies from the board. Sorry about that.

Q: General, admin and finance costs are high - pg 66 of annual report. Revenue went down but these costs went up.

A: This is due to the increased in staff and admin costs of the new acquisitions. The company is working to streamline these additional manpower resources to bring down the costs.

Q: Big drop in R&R revenue.

A: This is due to classification of projects. Some projects involve R&R and A&A works for example. The revenue is classified under A&A segment if major portion of the project consists of A&A works.

Secondly due to the recent lift problems, town councils allocated 40% of funds to fire fight lift the issues. So nowadays project values are only around S$1 M compared to S$5 M last time.

Q: Doubtful debt.

A: One customer is in receivableship but this debt is not written off yet.

Q: Cash receivable is negative.

A: This is mainly due to 3 reasons:

ISOTeam invested S$5 M in Sunseap. Bought another company for S$5 M. Invested in a new company HQ in Changi to consolidate operations.

ISOTeam will be selling off existing properties in Kaki Bukit, AMK, etc. This will have cost savings and generate profits.

Q: How is ISOTeam mitigating the increased competition from smaller players in the R&R segment?

A: Streamlining costs and acquisition of recent companies enables ISOTeam to offer a whole suite of services including M&E to customers.

Suggestion: A suggestion was also made to the board to use thinner paper for annual reports next time since it's in line with ISOTeam's 'Green' initiatives and will also leads to some cost savings.

Lastly, all resolutions are passed.

Summary for the Q&A:

Management gives the feeling that they know what they are doing.

Their answers are sincere. No brushing off of questions unlike AGM of other companies.

Most important point of the entire AGM. The food! Haha just joking.

Customary photo of the refreshments as follows. I thought the selection is nice. Not too excessive.

After the meeting has ended, the CEO is seen engaging in small talks with shareholders at the refreshment area. I crept over discreetly to join in and asked some further questions of mine.

This is what I gathered.

Next 1 to 2 years will be exciting years for ISOTeam and shareholders. Fruits of their recent plantings will bear by then and results are going to be very positive.

This is due to the several new streams of income from the new BUs and expected improved macro environment which will boost the performance of their R&R, A&A and C&P segments.

CnO and SGBikes are expected to contribute significantly to the top line and bottom line soon.

CnO is pending registration with NEA as a vector control product. Once done this will be pushed to other areas in Singapore with the support of the town councils. Successful trial has already been conducted in Tampines.

SGBikes is working very closely with the town councils, LTA, NParks and HDB. They have kicked off in Bukit Panjang and will extend very soon to Nee Soon. After that it will go on to other adjoining new towns.

There's another news which I won't share here due to the potential sensitivities. But this will be a huge advantage to SGBikes in the local bike-sharing industry.

By the way SGBikes is targeted to contribute 10% of ISOTeam revenue by next year. Imagine that!

Currently town councils are allocating 40% of their budget to fire-fight the lift issues. This is expected to change soon with the budget reverting to the previous HDB upgrading projects and this will likely boost the earnings of ISOTeam's traditional segments.

One key advantage of ISOTeam is that they are working closely with the government in their initiatives as mentioned above. The close relationships doesn't hurt do they?

Last but not least, get your bullets ready. There MIGHT be a big positive news coming up in months time.

In conclusion, this is somewhat similar to my experience with OCBC AGM 2016. I walked away from that AGM feeling confident of the company.

This time round I felt the same. Perhaps even more. Especially after my chat with the CEO and CSO during the refreshment after AGM.

I learned much more about the company and it's future plans from the informal chat than from the actual AGM and annual report.

I am seriously considering adding another 50,000 shares of ISOTeam now. Currently vested with 50,000.

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