Frencken (FGL) is in for more rough ride in 2012 :-
Revenue
- SGD currency will continue to be stronger than Euro (and MYR) so revenue will be affected again.
- Semiconductor (22% business segment) though declined 10.4% in 4Q but an improvement over 3Q 27% decline. 1Q12 will be a good indication of further weakness or turnaround?
- Medical (19% business segment) 25.5% growth in 3Q is nothing to shout about as 3Q10 was at exceptionally low quarterly run rate. It registered a 4.3% decline in 4Q. Its full year a 9.1% rise would not be an all clear sign that Medical is a winning business segment, yet. Let's see 1Q12.
- Analytical (17% business segment) is clearly in declining quarter on quarter trend though it recorded 14.7% growth at full year. If it is a seasonal business segment then 1Q12 should be at a very much high quarterly sales run rate of $14.6m.
- Industrial Automation (12% business segment) was a huge letdown with full year negative growth 41.5%
Gross Profit Margin
- GP margin contracted to 10.1% in FY2011 from 12.6% in FY2010 due mainly to a shift in sales mix and an increase in production costs. This will continue into 2012 particularly when one of its production facility is in China, which has becoming costlier.
- AR days almost unchanged as of year end 2011 at 76 days versus 2010 at 74 days but AP seems being paid earlier from 63 days (2010) to 53 days (2011). Is FGL losing support from its suppliers?
- Inventories showed improvement quarter by quarter in 2011 but it is still high at 86 days. In value terms, it ballooned from $62m in 2010 to $70.8m in 2011 and when sales is soft so, this is really quite bad.
- Cash conversion cycle days has worsened to 109 days (in 2011) from 83 days (in 2010)
- at year end 2011, free cash flow was at negative $13.8m
- dividend payout is declining year after year since year 2006. There was a one year improvement in 2011 but it is back to its lowering trend again when declared recently in 2012
- its analyst briefing slides are in black and white unlike previously which was in colour; probably serious belt tightening in progress in FGL.
Revenue
- SGD currency will continue to be stronger than Euro (and MYR) so revenue will be affected again.
- Semiconductor (22% business segment) though declined 10.4% in 4Q but an improvement over 3Q 27% decline. 1Q12 will be a good indication of further weakness or turnaround?
- Medical (19% business segment) 25.5% growth in 3Q is nothing to shout about as 3Q10 was at exceptionally low quarterly run rate. It registered a 4.3% decline in 4Q. Its full year a 9.1% rise would not be an all clear sign that Medical is a winning business segment, yet. Let's see 1Q12.
- Analytical (17% business segment) is clearly in declining quarter on quarter trend though it recorded 14.7% growth at full year. If it is a seasonal business segment then 1Q12 should be at a very much high quarterly sales run rate of $14.6m.
- Industrial Automation (12% business segment) was a huge letdown with full year negative growth 41.5%
Gross Profit Margin
- GP margin contracted to 10.1% in FY2011 from 12.6% in FY2010 due mainly to a shift in sales mix and an increase in production costs. This will continue into 2012 particularly when one of its production facility is in China, which has becoming costlier.
- AR days almost unchanged as of year end 2011 at 76 days versus 2010 at 74 days but AP seems being paid earlier from 63 days (2010) to 53 days (2011). Is FGL losing support from its suppliers?
- Inventories showed improvement quarter by quarter in 2011 but it is still high at 86 days. In value terms, it ballooned from $62m in 2010 to $70.8m in 2011 and when sales is soft so, this is really quite bad.
- Cash conversion cycle days has worsened to 109 days (in 2011) from 83 days (in 2010)
- at year end 2011, free cash flow was at negative $13.8m
- dividend payout is declining year after year since year 2006. There was a one year improvement in 2011 but it is back to its lowering trend again when declared recently in 2012
- its analyst briefing slides are in black and white unlike previously which was in colour; probably serious belt tightening in progress in FGL.
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