Hot stock: Noel Gifts hits over 6-year high with Playfair Road sale

SHARES of Noel Gifts International surged to a record high on Friday (Nov 24) after the group reported that it expects to book some S$30.61 million from the S$81.18 million sale of the 10 units it owns at 50 Playfair Road, a freehold industrial property.

This sum comes after accounting for estimated expenses to date, announced the mainboard-listed group before the market opened.

As at 9.23 am on Friday, the counter was trading S$0.095 or 47.5 per cent higher at S$0.295 after 149,200 securities changed hands. The last time it reached such levels was in January 2017.

It eased slightly to S$0.29, up S$0.09 or 45 per cent, at 9.45 am with some 199,500 shares moved.

Assuming that the sale had been completed on Jun 30, 2023, the group estimated that its net tangible assets per share for the FY2023 ended June would have been S$0.46 instead of S$0.30.

Had the sale of its 10 units taken place on Jul 1, 2022, its FY2023 earnings per share would have been S$0.1573 instead of S$0.0022.

The transaction is projected to bring Noel Gift’s full-year net profit to S$16.1 million, up from the S$225,000 profit reported for FY2023.

The sale of 50 Playfair Road was launched in mid-October this year at a guide price of S$70 million, or 16 per cent below its sale price of S$81.18 million.

The sale consideration translates to a land rate of S$895 per square foot per plot ratio.

Completion of the transaction remains subject to relevant approvals from the Strata Titles Board, or the High Court of Singapore if concerned parties object to the property’s collective sale.

The buyer, who was not identified, intends to use the site for a food factory.

In September, Noel Gifts disclosed that the net asset value of the 10 units it owned in 50 Playfair Road stood at S$14.7 million as of end-June 2023. The group booked net rental proceeds of S$358,000 from the units in its latest financial year.

The group said it intends to use the proceeds of the sale for future opportunistic acquisitions and investments, as well as to fund its general working capital requirements.

Noel Gifts retails handicrafts, fancy goods, flowers, plants and pet animals under its gift segment. The group’s property segment develops, holds and invests in properties.

The group said its gifts segment would be “wholly unaffected” by the sale of its units at 50 Playfair Road, adding that its principal business activities would remain the same after the transaction.

Shares of Noel Gifts closed 37.5 per cent or S$0.075 higher at S$0.275 on Friday.