Singapore Post

Singapore Post has acquired a 90% stake in Famous Pacific Shipping (FPSNZ) for an initial consideration of NZD3.6m. A potential earn-out consideration of effectively up to NZD4.4m based on the adjusted actual net profit of FPSNZ may also become payable, potentially bringing the total consideration up to NZD8.0m. FPSNZ is a New Zealand-based freight forwarder focusing primarily on sea and air freight forwarding together with customs clearance for inbound and outbound shipments from New Zealand. Sing Post’s freight forwarding arm currently has offices in 7 countries namely Singapore, Japan, Australia, China, Malaysia, UK and the USA, and the latest acquisition will allow Sing Post to broaden its freight network and establish an entry point into the New Zealand freight market, while strengthening the group’s ability to provide customers with an integrated ecommerce logistics solution. Over the past 18 months, Sing Post has been ramping up its regional logistics capabilities with new or expanded facilities including the development of a $182m fully integrated regional ecommerce logistics hub in Singapore which is expected to start operating in mid-2016. Currently, Sing Post has 22 warehouses across Asia Pacific, with area totalling 39,400 sqm. Management intends to continue beefing up its network infrastructure and capabilities via M&A and further capex spends in FY15-16. At the current price, Sing Post trades at 26.2x forward P/E and offers a dividend yield of 3.2%.