Construction firm Lum Chang Holdings’ interior fit-out business has lodged its preliminary offer document for the proposed spin-off listing on the Catalist board of Singapore Exchange(SGX).
The newly incorporated subsidiary, Lum Chang Creations (LCC), was created following an internal restructuring exercise to transfer Lum Chang Interior (LCI) into the group for the spin-off listing.
This is potentially the third IPO this year, after car dealer Vin’s Holdings which has already launched, while Info-Tech Systems lodged its draft prospectus last Friday and whose book building is ongoing.
Lum Chang Holdings first announced plans to spin off LCI last November, which it then held 80% of shares in. The remaining 20% is held under Lim Thiam Hooi, the managing director and co-founder of LCI. Lum Chang said that LCI has seen “strong growth” in recent years.
As at Dec 31 2024, the company’s order book for its conservation and restoration, interior fit-out and A&A services was $142.6 million and around $122.8 million as at 31 May, out of which, $34 million was won between Jan 1 and May 31. The orders are to be fulfilled in the coming three to two years.
Lum Chang believes that the spin-off will help “unlock” the potential value of LCI and be weighed separately versus the other existing businesses of construction and property development and investments.
According to the offer document, Lum Chang Creations is one of the leading urban revitalisation specialists in Singapore with comprehensive capabilities in providing niche conservation and restoration works complemented by our expertise in interior fit-out works as well as addition and alteration (A&A) works.
Some of its completed projects for conservation and restoration works include St James Power Station and the conservation warehouse at Clarke Quay. It is currently transforming and redeveloping a three-storey conservation warehouse at 2 Cavan Road into a 8-storey hotel and two units of conservation shophouses at 44 and 46 Club Street into a family office.
LCC operates on an asset-light business model by outsourcing part of its work to trusted contractors, suppliers, artisans, consultants and interior designers with whom they have long-standing relationships.
LCC plans to embark on regional expansion, offering its services to Malaysia. It intends to expand its portfolio of interior fit-out and A&A projects in the high-end residential sector, and explore acquisitions, investment opportunities, strategic alliances and/or joint ventures.
LCC’s earnings from FY2022 ended June 30 stood at $503,000, and grew to $4.723 million for FY2024. Revenue from FY2022 to FY2024 grew from $14.04 million to $58.97 million. LCC’s pre-invitation earnings per share for FY2022 was 0.18 cents, which grew to 1.69 cents per share in FY2024.
As at the latest practicable date, the group has cash and cash equivalents of $23.3 million. The group’s operations has so far been funded through internal and external sources including cash generated from the group’s operating activities, and credit facilities from financial institutions, credit granted by suppliers and capital investment from shareholders.
Lum Chang says that it will make further announcements as and when there are further material developments in relation to the spin-off listing.
This story first appeared on The Edge Singapore.
