Hot stock: Oxley up 4.4% after H1 profit more than doubles to S$34.1m

SHARES of Oxley Holdings rallied at the start of the week, a day after the property developer announced that its half-year net profit more than doubled to S$34.1 million, from S$15.7 million a year ago.

This came on the back of higher revenue and lower finance costs, the mainboard-listed company said.

The mainboard-listed counter finished at S$0.24 on Monday, up S$0.01 or 4.4 per cent, with some 9.47 million shares changing hands.

No married deals were recorded by the afternoon trade, according to Shareinvestor data.

Both Lim & Tan Securities and RHB Research have "buy" calls on Oxley, with a target price (TP) of S$0.23 and S$0.27 respectively.

RHB analyst Jarick Seet believes the stock is up due to the positive results announced, which may have allayed some fears investors have about Covid-19 creating a negative impact on property developers. "Our TP remains unchanged for now pending a new update," he told The Business Times on Monday.

For the six months ended Dec 31, Oxley's revenue rose 25 per cent year on year to S$745.4 million, lifted by contributions from a wholly-owned subsidiary in Australia that was consolidated into the group's results from October 2019.

Stripping out revenue from the subsidiary, group revenue for H1 FY21 would have been 9 per cent higher, largely due to development projects in Cambodia, Singapore and the UK. This was partly offset by lower revenue from a project in Ireland and the group's hotels in Singapore.

Earnings per share for the period under review increased to 0.81 Singapore cent from 0.37 cent previously. No dividend was declared for the six-month period, compared to a dividend of 0.32 Singapore cent per share in the corresponding period a year ago.

During the six-month period, other income rose to S$3.8 million from S$727,000 a year ago, largely due to government grants.

Finance costs eased 30 per cent to S$56.4 million owing to the repayment of retail bonds and bank borrowings, as well as a drop in interest rates.

Meanwhile, share of results from associates and joint ventures tumbled 82 per cent to S$2.2 million, arising from the absence of share of profit from an associated company in the United Kingdom which was divested in the second half of FY20.

In an update, Oxley highlighted that it had a total unbilled contract value of about S$3.1 billion as at Jan 31, 2021, of which about S$2.6 billion were from projects in Singapore.

As at end January 2021, the group had secured total sales for its development portfolio worth almost S$9.1 billion, of which S$3.73 billion was from projects in Singapore. The developer also said that its development projects are expected to fall behind their target completion dates due to the "circuit-breaker" in Singapore last year, as well as the ongoing lockdowns in other countries in which it operates.

The group has a business presence across nine markets, namely Singapore, the UK, Ireland, Cyprus, Cambodia, Malaysia, China, Vietnam and Australia.

As at Dec 31, 2020, Oxley had cash and cash equivalents of S$233 million, it said. Net gearing decreased to 2.31 times, compared to 2.48 times as at June 30, 2020.

Since March last year, its hotels on Stevens Road in Singapore have functioned as government quarantine and stay-home notice dedicated facilities, generating positive cash flows from operations.