ISOTeam

ISOTeam: In a company feature by the Business Times and Edge Magazine over the weekend, ISOTeam guided that it was almost 100% immune to Singapore’s softening property market, led by its focus on maintenance and upgrading, as opposed to new builds. As a start, most of ISOTeam’s contracts on average range from between $5m to $10m, making them too small for construction companies to bid for them, yet ISOTeam’s specialty in the business, repairs and recordation (R&R) segment ensures a steady supply of contracts, with the firm bidding for at least three to five contracts every month. Success rate in bidding for the contracts also appears high, with the firm already creating its own niche and cementing its position as the largest R&R player in the public sector, counting the HDB and town councils as amongst its key clients. Moving forward, the firm aims to increase its scope of services, where their relatively new design and renovation business, Zara@ISOTeam has already seen the segment clinching more than 20 projects during its first nine months of incorporation, while the group also plans to develop a division which will specialize in the rental of equipment to other players in the R&R industry. ISOTeam is also on the lookout for M&A’s to grow its business, and remains open to either a horizontal or vertical acquisition strategy. At the same time, the group aims to expand its services to untapped markets, which could include the likes of military camps, industrial parks and education institutions etc. Acknowledging the dampening effect of rising labour costs, ISOTeam plans to reduce its 450 strong workforce by 20% over the next two year, while improving its automation and staff skills process, to bring about greater efficiency and productivity. The group currently has an orderbook of ~$73.2m underpinning revenue visibility over the next year, and at current price ISOTeam trades at 7.9x forward P/E. The street has 2 Buy ratings with a consensus TP of $0.67.