A soft quarter on lower recognition of projects. 3Q PATMI declined 21.5% YoY, mainly due to a weaker Interiors division. The Interiors division's revenue fell 30.4% YoY to S$31.9mil, mainly because most of the larger projects were completed and recognized in 2QFY12,   and that 3QFY11 was exceptionally strong on store fixtures roll'out programmes and several 'agship stores projects.

Slight decline from the Exhibitions & Museums division.  The division contributed S$32.7mil in revenues in the quarter, down 8.4% YoY. In 3Q, Kingsmen delivered works on the London Olympics, F1 Singapore Grand Prix, Gardens by the Bay, Sotheby's Visitor Centre in Hong Kong and GuangZhou HengDa Exhibitions Centre, amongst others.

Smaller segments exhibited stronger growth.  The Alternative Marketing and Research & Design divisions registered 53.3% and 23.6% growth YoY in the quarter.

We expect 4Q to be stronger on seasonal demand and project recognition. We will release a report later today, pending a call with the management. In the meantime, we place our rating of BUY with FV of S$0.86 under review.

Source: AmFraser