Singpost appoints financial adviser for strategic review of Australia business
This is part of the national postal service provider’s plans to achieve scale in the country
SINGAPORE Post (Singpost) announced on Friday (Jun 21) its appointment of Merrill Lynch Markets Australia as a financial adviser to its board.
The move comes three months after the national postal service provider completed a review of its business, where it identified achieving scale in the Australia market as one of its five strategic thrusts it plans to undertake in the next three years.
This includes exploring near-term partnerships that can contribute to growth, providing equity to deleverage acquisition debt, and creating an independent valuation benchmark.
The group also intends to continue seeking opportunities for mergers and acquisitions and future liquidity options.
In its latest bourse filing, Singpost said that the adviser will work with its board to “formulate optionalities for the group’s Australia business specifically”.
A subsidiary of Singpost previously acquired Border Express, a pallet and parcel distribution operator in Australia, for a maximum purchase consideration of A$210 million (S$183 million).
The move comes as Singpost works to lift its market value, amid plans to pivot towards becoming a pure-play logistics provider.
Following the strategic review, the group announced potential plans to divest its non-core assets. One of these assets is Singpost Centre, its flagship retail-commercial mixed development located at Paya Lebar Central.
The property, which has a gross floor area of 137,134 square metres and an annual yield of 3 to 4 per cent, was valued at S$1.1 billion as at September 2023. No timeline was disclosed for the property divestment or other non-core assets.
The group’s chief financial officer, Vincent Yik, pointed out that divestment depended on several considerations, including market conditions, the use of funds, regulatory approval, and operational needs.
Floating its Australian business was also an option which stemmed from the strategic review.
Singpost’s other strategic thrusts include reorganising the group into three business units of Singapore, Australia, and International, as well as transforming its urban logistics and deliveries business in Singapore.
In its latest financial report, the group’s net profit jumped 93.4 per cent to S$66.9 million in its second half ended March, from S$34.6 million the year prior. This brought Singpost’s full-year net profit to S$78.3 million, up 217.4 per cent from S$24.7 million in FY2023.
The rise in net profit was supported by S$38.8 million in exceptional gains, attributed mainly to a fair-value gain on Singpost Centre.
Full-year revenue, however, fell 9.9 per cent on year to S$1.7 billion, mainly due to a drop in sea freight revenues.
Shares of Singpost closed 1.1 per cent or S$0.005 higher at S$0.455 on Friday.