GK Goh H2 earnings up 27% on Boardroom resilience; 2 S cents dividend proposed

MAINBOARD-LISTED GK Goh's earnings for H2 ended December rose 27 per cent to S$6.6 million, on the back of a resilient showing from its corporate services segment, as well as growth in its aged care and investment businesses.

The firm has proposed a first and final dividend of two Singapore cents per share for FY2020.

Revenue for the half-year grew 34 per cent to S$81.1 million, boosted by a 9 per cent growth in revenue in the corporate services segment, which includes the privately-held firm Boardroom, to S$60.6 million. Meanwhile, revenue from aged care services grew over 15 times to S$1.5 million, while investment income more than tripled to S$15.3 million.

However, for the full year, GK Goh saw a 82 per cent drop in profit to S$1.5 million, even as revenue grew 16 per cent to S$135.6 million. This was due to sharp swings in the Australian dollar, which led to S$9.3 million in foreign exchange losses.

Nevertheless, the company had booked a foreign currency translation gain of S$14.6 million, resulting in currency effects adding S$5.3 million to its other comprehensive income.

Boardroom's revenue for the full year proved resilient during the pandemic, rising 6 per cent to S$112.5 million. Its Australian business did especially well. GK Goh confirmed that it is continuing to evaluate a possible divestment of Boardroom, and that an announcement will be made in due course.

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Meanwhile, the aged care business had its first full year of operations under Allium Care Suites. However, the pandemic disrupted plans to build up occupancy, as the lockdown meant that care home residents were not allowed visitors in order to reduce infection risks.

"Marketing was significantly affected during that period, as were the operations of our two day-care centres. We decided to close the latter in September and to consolidate all our day-care operations within the premises of Allium Care Suites," GK Goh said in its earnings.

Occupancy at Allium Care has since improved in H2, but overall, Allium's Singapore operations recorded a full-year loss of S$7.9 million.

Meanwhile, GK Goh's Australian associate Opal Aged Care Group contributed S$8.7 million to the full-year net profit, down from S$10.4 million a year ago, due to being affected by the bush fires at the start of 2020, and then the Covid-19 outbreak. Its revenue grew 5 per cent, driven by a 6 per cent increase in net new beds.

Looking ahead, GK Goh expects Boardroom's earnings to continue to improve, while Opal may be affected by further Covid-19 outbreaks. Allium Care is expected to reduce its losses on improvements in bed occupancy.

Shares of GK Goh closed at S$0.935 on Friday, down 0.53 per cent.