Tuesday, January 8, 2013

Stamford Tyres

Stamford Tyres: In the past 4 wks, share price has slowly awakened and then picked up speed. Notably yesterday, it closed with a 19.5% gain at 46c after touching an intra-day high of 47c. It is the highest close it has ever had in at least the past 5 years. Recall in its last AGM, grp gave an overview of Stamford Tyres' plan to develop a new warehouse next to its HQ at a cost of about $23m. The warehouse will have 21,000 sqm of space, which will replace the 18,000 sq m belonging to third-party warehouses that the Grp currently leases and result in greater sustainability in operating profits in the long term. Shareholders note that Grp owned 35,000 sq m of industrial land in SG, which has risen strongly in value since the properties were bought many years ago. As a result, the revalued NTA of the Gro is signifcantly higher than the reported 48.12c/share for the book value and the 33c recently-traded price of its shares. Grp told investors that its HQ was bought for $650,000 and then rebuilt for $11m (with $6m from insurance proceeds) after a fire destroyed it in 1997 and is currently worth approx. $40-45m. Shareholders suggested that Grp consider a sale and leaseback in order to unlock the value of the property, although the idea was put aside by the grp during the AGM.

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