Singapore Corporate News - 29 Aug 2007

Hupsteel doubles net gain to $31.2m

HUPSTEEL, a provider of a wide range of steel products and services to the oil and gas, offshore and marine engineering, petrochemical and construction industries, yesterday reported a doubling of its full-year earnings to $31.2 million. Revenue climbed 53 per cent to $284.2 million.

About a third of that profit was made in the last three months ended June 30. For that quarter, net profits came to $10.6 million, a surge of 64 per cent, while revenue grew 68 per cent to $86.9 million.

Earnings per share for the year amounted to 6.89 cents per share, and net asset value was 32.1 cents as at June 30. This means that the stock is trading at 7.3 times last year's earnings and 1.56 times its book value.

Hupsteel is generous in sharing the spoils with its shareholders. It is proposing a 1 cent special dividend and 0.5 cent final dividend. Including the first and second interim dividends of 1 cent and 0.5 cents per share respectively, the full year payout totalled 3 cents. That's a dividend yield of some 6 per cent based on its last traded price of 50.5 cents.

Neocorp to acquire steel trader in RTO deal

THE judicial managers of Neocorp yesterday said that the company has entered into a conditional sale and purchase agreement to acquire a steel products trading group, Novo Group, for $110.65 million, in a reverse takeover deal.

Novo Group's operations are largely based in Hong Kong, China and Singapore. Two companies in the group, Novo Commodities Pte Ltd and Novostal Pte Ltd, have received Global Traders Programme accreditation from International Enterprise Singapore.

The sale price is based on 10 times Novo Group's FY2007 net profit after tax.

Neocorp will pay for the purchase by issuing 3.69 billion new shares to the current owners of Novo Group, Dicky Yu Wing Keung and Chow Kin Wa.

Meanwhile, Messrs Yu and Chow have agreed to loan Neocorp $3 million to pay for professional fees and other expenses associated with the acquisition. They have the option to convert the loan amount to 100 million new Neocorp shares at 3 cents a share.

Among the conditions to be met, Neocorp has to be satisfied by Sept 10 with the results of due diligence on Novo Group, and existing Neocorp shareholders have to approve the allotment and issue of 64.7 million new shares to the company's creditors. Messrs Yu and Chow will own the bulk of Neocorp, which will be renamed Novo Group.

The proposed acquisition, had it been completed on Dec 1, 2003, would result in Neocorp having an earnings and net tangible asset per share of 0.15 cents each. The corresponding numbers before the proposed acquisition were -1.07 cents and 10.91 cents.

As at July 31, 2007, Neocorp - which has been suspended for about two years - had a net tangible liability of 3.34 cents per share.