INTER-ROLLER: Will good times roll around again soon?
Drizzt’s Take:
Inter-roller fell by more than 20% since i first bought it. Here’s a good article from Next Insight on the company. Personally, for interroller to enjoy the past results, they would have to secure more contracts. The operating environment is getting difficult. This is a time to show if they have the mantle to actually pull through this.
To be able to get recurring income is a plus point. However, I don’t forsee anytime soon that any efforts to improve recurring income would become substantial.
This article, the fourth in a series by external contributors, is adapted from an original piece by "donmihaihai".
“WE STRIVE to be a living company” – this vision of Inter-Roller Engineering captured my attention when I flipped throught its annual report 2006.
I wondered: What in the world is a living company?
It’s not entirely alien to me as I had encountered this phrase in a book “The Dhandho Investor: The Low-Risk Value Method to High Returns.”
I had also heard of the highly-rated book, “The Living Company”, and I decided to surf to eBay to buy it.
It’s on how companies could be run for long-term success, and this would be my bed-time reading for the next few weeks.
I suspect that for many companies having a vision
is not much of a deal. I wasn’t so sure about Inter-Roller, though.
Its people are its key assets, as reflected by the staff costs (at S$29.6m for FY2006) being almost 20X more than the cost for depreciation for its tangible assets (S$1.5m for FY2006).
Inter-Roller has a very profitable business and it has produced lots of free cash flow from 2002 to 2006.
Based on the free cash flow over equity for the past five years, the return was approximately 15%.
I thought that this was good considering that many companies are not able to produce any meaningful free cash flow in the first place.
Inter-Roller’s core business is mainly in developing airport logistics systems such as:
* Airport Baggage Handling Systems;
* In-flight Catering Systems;
* Air Cargo Handling Systems; and
* Express Courier Handling Systems.
Inter-Roller has had a good track record arising from its success in Changi Airport, the latest being its installation of its baggage-handling systems in Terminal 3 and Budget Terminal. The company has expanded out of Singapore to become a global company.
Over 89% of its revenue was generated outside of Singapore in FY2006 compared to 76% in the previous year. China contributed 46% of the Group’s turnover while Middle East, 27%. This seems a truly internationalising SME.
Related posts:
- Inter-roller Engineering Full Year results:Was it that bad?
- MyBlogLog Launches New Reader Roll
- New York Times: The Debt Trap
- Discretionary spending hack in uncertain times
- Sunday Times Article: Surviving Market Turmoil
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Comments
No comments yet.
Leave a comment