JustCo Commits to 50% Dividend Payout as Loss Narrows Post-IPO

Dividend Policy Anchors Growth Confidence

JustCo announced it will distribute 50% of net profit as dividends from fiscal 2027, a policy the newly public flexible workspace operator says reflects confidence in generating sustained earnings as its regional footprint scales. Executive chairman and CEO Kong Wan Sing told analysts the ratio emerged from modeling the company's growth trajectory, capital requirements, and cash flows over the next three to five years.

The calculation factors in the expected blend of traditional lease agreements, which require JustCo to fund fit-outs, and asset-light management contracts where landlords shoulder those costs. Even under conservative assumptions, Kong said, the group can comfortably fund committed expansion while returning cash to shareholders. The 50% ratio aims to deliver a meaningful yield relative to the S$0.94 initial public offering price and peer benchmarks.

First Results Since Listing

JustCo reported a net loss of US$839,000 for the six months ended June 30, down 52% from US$1.7 million a year earlier. Loss per share narrowed to US$0.0017 from US$0.0045. Stripping out one-off expenses, the company would have posted a modest net profit after tax of roughly US$100,000 for the half.

Revenue advanced 24% to US$80.8 million, up from US$65.1 million in the prior-year period, driven by network expansion and higher revenue per workstation. That metric rose 11% year-on-year to US$468.45 per month across the portfolio. The company listed on the Singapore Exchange on May 22.

Cash Generation Accelerates

Free cash flow surged 256% to US$3.2 million in the first half, from around US$900,000 a year ago, as cash earnings before interest, taxes, depreciation, and amortization more than covered capital expenditure on new centers. Cash on the balance sheet stood at US$169.4 million at end-June, up 63% from year-end 2025.

Kong emphasized that the jump in free cash flow demonstrates the operations can be self-funding, positioning the company to pursue committed growth without returning to the market for additional capital. Cash EBITDA margin climbed to 13.1% in the half, from 6.6% in the prior-year period and around 10% for full-year 2025. Kong said he expects the margin to continue rising into the double digits even as new centers open, with a personal target floor of 15%.

Network Expansion and Occupancy

The operator's network grew from 50 centers and 35,067 workstations at end-2025 to 57 centers and 37,350 workstations by June 2026. Management plans to reach 78 centers by January 2027. Average portfolio occupancy stood at 80% in the first half, down from 82% previously, but mature centers, those operating more than a year, posted 85% occupancy, up from 83%.

Non-mature centers, which can be at widely varying stages of ramp-up, showed occupancy between 20% and 30%. Kong noted the average lease term across co-working spaces is 1.5 years, with roughly 30% of customers staying more than five years, another 30% between three and five years, and under 10% less than a year.

Deloitte Anchors Orchard Point

In July, JustCo unveiled JustCo Place at the former Taste Orchard mall in the OG Orchard Point building. Deloitte Singapore will occupy all 64,000 square feet of co-working space there, with the first cohort of employees moving in September and a second batch in October. Kong declined to disclose commercial terms but said the center has already fielded additional inquiries and has no remaining capacity.

The company has yet to receive formal termination notice for its 57,000-square-foot Marina Square center, though Kong expects one eventually as the landlord pursues redevelopment. Such a notice would typically provide nine to twelve months' lead time, which he described as ample. Contingency plans are in place, including absorbing displaced tenants into the now fully leased JustCo Place and other locations, which would further lift occupancy rates.

Market Reception and Outlook

JustCo shares closed at S$0.64 on August 7, up 1.6% for the day but still 32% below the IPO price. DBS initiated coverage in July with a buy rating and a twelve-month target price of S$1.06. Asked about the share performance, Kong called the stock "insanely undervalued" and pointed to broader pressure on Singapore IPOs. He said management would remain focused on execution and investor education, letting results speak for themselves.