Concerns of weak prospects at Low Keng Huat belie a history of strong shareholder returns

[SINGAPORE] The offeror for Low Keng Huat (Singapore), or LKHS, stated a number of reasons for shareholders of the property group to consider accepting the S$0.72-per-share deal it put on the table after the market closed on Nov 28.

The most convincing of these might be the assertion that realising profits from the group’s property assets in the future “may be irregular, variable and much more time-consuming”.

Similar to other Singapore-listed real estate groups, LKHS’ revenue and earnings have been volatile over the years. Only a few weeks before the offer was made, the group reported a loss of S$10.2 million for the six months ended Jul 31, versus earnings of S$5.8 million for the same period the previous year, as its revenue sank 85 per cent to S$38.7 million.