SingPost

SingPost: FY14 net profit missed. 4QFY14 net profit rose 17.7% y/y to $30.7m, while revenue increased 5.9% to $193.3m, as new subsidiaries and e-commerce activities drive growth. Domestic mail volumes continued to decline, marking a second consecutive year. Bottom line was buoyed by a decline in finance expenses due to a bond repayment last year and the absence of a write-off on intangible assets. Management notes that whilst mail volumes is expected to continue a downtrend, operating costs, in particular manpower costs, have and will continue increasing. Nonetheless, it expects a $100m capex over 3 years beginning FY14 would help maintain its service quality standards. Management will also continue its focus on e-commerce in Asia Pacific. E-commerce related revenues made up 26% of FY14 revenue. SingPost is trading at 25.6x annualized 4QFY14 P/E. Final dividend of 2.5¢ proposed, bringing full year DPS to 6.25¢, implying full year yield of 4.3%