Lum Chang Creations, which comprises Lum Chang Interior, Lum Chang Decor and Lum Chang Brandsbridge, was formed through an internal restructuring exercise that transferred Lum Chang Interior into a new corporate vehicle for the spin-off listing.
Priding itself on being “one of the leading urban revitalisation specialists in Singapore”, Lum Chang Interior, a key subsidiary under Lum Chang Creations, provides niche conservation and restoration works, interior fit-out works, as well as additions and alterations (A&A) works.
Some of the company’s completed projects for conservation and restoration works include St James Power Station and the conservation warehouse at Clarke Quay. The firm is currently transforming and redeveloping a three-storey conservation warehouse at 2 Cavan Road into an eight-storey hotel and two units of conservation shophouses at 44 and 46 Club Street into a family office.
“Lum Chang Creations has grown rapidly and we have built a strong presence in the industry, especially in the conservation sector,” says Lim Thiam Hooi, Lum Chang Creations’ managing director, in an interview with The Edge Singapore on June 30.
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As such, the group believes that now is the “right time” for the company to “grow further” as an independent entity.
Given that its line of business is different from its parent, a spin-off listing would also allow Lum Chang Creations to focus on its own business growth while giving the company its own platform to raise capital and attract partners, Lim adds.
Furthermore, a listing would provide the company with more credibility and visibility, which helps them become better recognised in the market and ultimately provides them with more opportunities and invites to more project tenders.
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Asset-light model built around people
Unlike its parent company, which is one of Singapore’s leading main contractors, Lum Chang Creations operates an asset-light model that does not rely on heavy equipment and machinery.
Instead, Lum Chang Creations operates within a more niche space that relies on a good team of skilled workers. And what sets the company apart from its competitors is its in-house team of artisans and skilled workers.
“We have our own artisan workers and we do our own urban revitalisation specialist work,” says Lim.
He adds that their staff’s know-how is what keeps costs down. This model also allows the company to remain nimble and scale up and down easily.
Beyond costs, Lim recognises that the company’s key assets are its people. During the interview, he shared that the company has a very low turnover rate of “almost zero”, with about 90% of his core team remaining with him since day one. This can be attributed to his philosophy, where he regards his employees as partners.
“Ownership is key,” he shares, adding that he treats his staff like family, which helps boost morale and engagement.
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One example of the team’s cohesion can be seen in its restoration work at St James Power Station, which took place amid the Covid-19 pandemic. Due to the building’s heritage status, every brick had to be carefully conserved, making the project particularly labour-intensive. That project, which should have taken around 18 months, took two years instead due to the circuit breaker restrictions.
Lim recalls how the team pulled together during that period, with workers housed onsite and everyone pitching in to keep the project moving. “That’s what you do for your family and that’s why I treat them as such,” he says.
The company also invests in the long-term development of its staff, with its teams cross-trained and exposed to various types of projects. Lim says: “All industries require commitment and ownership. The minute you have it, success will follow.”
Sustainable demand for restoration works
In its prospectus, Lum Chang Creations reported earnings of $503,000 in FY2022 ended June 30, 2022. The company’s earnings rose to $4.5 million in FY2023 and $4.7 million in FY2024. Revenue from FY2022 to FY2024 grew from $14 million to $59 million. The company is also net cash.
Lim, who established Lum Chang Interior in 2018, attributes the company’s growth to the company’s competitive strengths. This includes a proven track record in completing and securing a wide range of public and private projects, its asset-light business model focusing on cost management, as well as its experienced and dedicated management team.
Following the Covid-19 pandemic, Lim says the company began seeing more jobs and an upward trend that he believes is sustainable.
He notes that the growth boils down to the fundamentals, given that Singapore is small and has limited land space for redevelopment.
Instead, owners are likely to opt for A&As, conservation and restoration works to maintain their properties, such as hotels.
Conservation and restoration are also in line with the government’s plans, with Lim highlighting the Urban Redevelopment Authority’s (URA) plans to preserve the Singapore Turf Club.
Lum Chang Creations is already seeing more business coming its way. In 1HFY2025, the company reported earnings of $5.3 million, surpassing the $4.7 million posted for the whole of FY2024.
“FY2025 is a good year. FY2026 [will also] be better. We are optimistic,” says Lim.
The company’s order book for its conservation and restoration, interior fit-out and A&A services stands at $142.6 million as at Dec 31, 2024, and around $122.8 million as at May 31. This year alone, new contracts awarded amounted to $34 million.
To Lim, the company’s next order book goal is at the “sweet spot” of $200 million after hitting $177.8 million last September. That amount is sustainable enough for its team of people, Lim notes.
Lim also sees the retail and commercial interior fit-out segment eventually forming a larger part of the business as he sees “potential”.
In for the long run
When asked why the company chose to list on the Catalist board instead of aiming for the Mainboard, Lim explains that the former is suitable for high-growth companies, and Lum Chang Creations is a fast-growing firm.
While the company’s ultimate aim is to be on the Mainboard, Lim believes in taking it a step at a time.
“To get ourselves listed is already a dream [and] we’re very close to realising that dream,” he says.
He adds that the company is in it for the long run by pricing its shares “competitively”.
“We are not going for a very high P/E ratio,” says Lim, adding that, unlike some of his Catalist-listed peers, Lum Chang Creations is not trying to max out the amount of funds raised during its IPO. Instead, the company will look at raising funds through placements in future.
At this point, Lim notes that the company is “very reasonable” in its pricing. Why? “Because we believe in making sure that [our] shareholders are taken care of,” he says.
While the company does not have a fixed dividend policy, it says it intends to recommend dividends of not less than 30% of its earnings for FY2025 and FY2026.
On the payout ratio, Lim believes the figure is “fair and reasonable” while providing the company with “enough capital” for future plans such as mergers and acquisitions (M&As) and regional expansion programmes.
At the moment, the managing director is considering some M&As, including businesses that are complementary to Lum Chang Creations’ segments. The company is also setting its sights on operations in Malaysia and Indonesia, which may take place “very soon” after the listing.
As to his conviction with the business, Lim has volunteered to subject his shares to a 10-year moratorium beyond the contracted period of 12 months.
“I’m here to stay,” he says, adding that the business is “like a baby” to him.
