Part 2 of Kingsmen’s analysis shall touch on the Cash Flow Statement analysis and review, as well as the different business divisions of the Group and their clientele and customer base.

Cash Flow Statement Analysis

Looking at Kingsmen’s cash flows, one can see that apart from FY 2003 (listing year), they had managed to generate free cash flows (FCF) every single financial year from FY 2004 to FY 2008. For 9M FY 2009, the presence of negative operating cash inflows was due to the large Universal Studios contract which had a lot of unbilled revenues attached to it. Thus, there was a time lag in billing and receiving the cash, which was why the receivables had climbed significantly in relation to the rise in revenues.

One can also observe that apart from FY 2008 where there was a major acquisition of PPE, working capital requirements in terms of capex are low for Kingsmen’s business and the business is adept at generating excess cash which it then pays out as dividends to shareholders. Starting from FY 2008, Kingsmen had started to pay out 2 dividends per year – interim as well as final. Read more…