How can a large conglomerate more than twice as old as Singapore forge meaningful ties with its 21st Century shareholders? Singapore-listed Straits Trading Company believes it takes more than a typical AGM gathering to foster a sense of belonging among its owners.
Incorporated in 1887, The Straits Trading Company is a conglomerate-investment company with diversified operations and financial interests internationally in resources, property and hospitality.
Its investments include strategic stakes in Straits Real Estate, ESR Cayman and Far East Hospitality Holdings, as well as in one of the world’s leading tin producers, Malaysia Smelting Corporation, which is dual listed on Bursa Malaysia and the Singapore Exchange. It also holds a diversified property portfolio that is wholly-owned by the group.
The breadth of the portfolio may appear intimidating to some. To better explain these operations, Straits Trading hopes to foster more than just a transactional relationship with its shareholders by means of a community initiative: the Straits Trading Shareholders’ Club.
Straits 5.0
Following a successful takeover by the Tecity Group in 2008, Straits Trading has successfully refocused its businesses into scalable assets and sustainable growth engines. As it continues to embark on the next phase of transformation with Straits 5.0, Straits Trading sets its sights on new growth engines including a focus on new economy assets, such as logistics and warehouse retail.
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The launch of the Straits Trading Shareholders’ Club is part of its Straits 5.0 growth initiatives. The Shareholders’ Club seeks to engage active shareholders as a community, enhance the level of knowledge in Straits Trading’s businesses and to enable co-investment opportunities.
In line with this, Straits Trading plans to grow through securitisation of assets with its track record of value realisation through working with right partners, family offices and financial institutions. Straits Trading actively looks out for opportunities to efficiently allocate capital for risk-adjusted returns and drive long-term value for shareholders.
A community initiative by the company
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Launched last September, the Straits Trading Shareholders’ Club aims to strengthen ties between the management and shareholders of the 135-year-old company.
Said to be the first of its kind in Singapore among listed entities, registration is free and open to shareholders holding at least 100 shares. Registered shareholders of the club will have access to experiential events, expert insights webinars and investment product launches. In addition, registered shareholders who are accredited investors enjoy co-investment opportunities in real estate securities and participatory notes.
Accredited investors in the Straits Trading Shareholders’ Club enjoy co-investment opportunities in real estate securities, like these residential properties located at Cable Road in Chatsworth Park and Woollerton Park in Gallop Green
The first two of such offerings include fractional ownership on a Good Class Bungalow located at Cable Road in Chatsworth Park, and a residential property located at Woollerton Park in Gallop Green. Minimum investment amounts range from $200,000 to $500,000, with no lock-in period.
Straits Trading has set up two investment vehicles to hold these two investments. Both will issue notes with an annual cumulative interest of the subscription price, with the possibility of special distributions at the property’s sale after five years. That said, the investment period may change depending on prevailing market conditions.
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According to the company, registered shareholders can also spend time with Straits Trading’s management team, where they can exchange views on the latest market trends.
Apart from that, the Straits Trading Shareholders’ Club hopes to offer registered shareholders experiential journeys as well.
The Gallop Extension at the Singapore Botanic Gardens is part of the Straits Trading 135 Years New Heritage Trail. Two of the colonial houses located at No. 5 & No. 7 Gallop Road served as residence for Mr Charles McArthur, ex-chairman of The Straits Trading Company Limited in the early 1900s
For starters, all registered shareholders will enjoy a special guided tour of the Gallop Extension led by Singapore Botanic Gardens' volunteers on May 21. The Gallop Extension at the Singapore Botanic Gardens is part of the Straits Trading 135 Years New Heritage Trail.
Shareholders who register to be part of the Straits Trading Shareholders’ community will also receive a one-year complimentary digital subscription to The Edge Singapore, where they can gain access to credible investing ideas from in-depth stock analysis, interviews with key executives and latest updates on corporate movements.
Gained growth momentum
With the vision of a conglomerate-investment company with diversified businesses, the strategy behind Straits 5.0 is paying off. For its FY2021 ended Dec 31, 2021, the group reported record EBITDA of $401 million, threefold from the year prior.
Straits Trading’s profit after tax and non-controlling interest (PATNCI), meanwhile, was up 355% y-o-y to $234.3 million in FY2021. The group attributes this to higher contributions from Straits Real Estate, a wholly-owned subsidiary of Straits Trading since April 2021, which enjoyed gains from the portfolios of Australian and Korean logistics properties.
Straits Trading also enjoyed gains from its 52.0% stake in Malaysia Smelting Corporation, which recently chalked up record earnings. Nevertheless, its real estate business is the main contributor to earnings. This segment posted PATNCI of $232.7 million in FY2021, compared to $69.8 million a year prior.
For more information about the Straits Trading Shareholders’ Club, visit www.shareholdersclub.sg
Photos: Straits Trading, National Parks Board
