JAG Bhd sees revenue growth of 25% to 30% for 2017

SHAH ALAM: Waste management company JAG Bhd, which is diversifying into property development, expects to seal another property development deal by year-end, said its executive director Datin Stacey Tan.

“We are on the lookout all the time for more land for our pipeline, even from last year. It can come in various forms – whether pure buying, joint ventures or strategic partners. We should have something by end of this year,” she told reporters after its AGM and EGM yesterday.

In terms of land acquisition, she said it is not limited to any specific location and is looking at opportunities in all states.

Since obtaining shareholders’ approval for its diversification, the group has submitted its building plans and is looking to launch its maiden project in the fourth quarter this year.

The mixed development is located on 3.33 acres of freehold land in Klang, with an estimated gross development value of RM155 million to RM170 million.

Tan said the maiden project will only start to contribute towards the group’s revenue in 2019 and 2020. She said the long-term target is to have 50:50 revenue contribution from its two core businesses – waste management and property development.

“In five years’ time, we hope to secure another two or three more property projects. We could hit the 50:50 target by then, or it could be sooner,” she added.

The group expects revenue to grow 25-30% for the financial year ending Dec 31, 2017 (FY17), driven by its waste management business, particularly electronic waste (e-waste).

“We managed to secure more contracts from our suppliers, of which there are existing suppliers who gave us more contracts and new suppliers as well. So that would translate into higher revenue,” she said.

She said the contracts in hand this year are 40% more than last year, which are mostly e-waste from the semiconductor industry. For e-waste alone, the projected revenue is at least RM100 million for FY17 compared with RM80 million for FY16.

The uptrend in commodity prices, especially copper and the weakening of the ringgit, which benefits its exports, are expected to further boost its FY17 performance.

On its non-core business, Tan said its coin-operated laundry business which began in September 2015 is already profitable, raking in RM2.3 million revenue and RM335,000 net profit in FY16.

The group signed an agreement with a local principal to open 10 outlets and has opened nine to date. She said it will continue expanding the business as long as it remains profitable.

The ACE Market-listed company returned to the black last year with a net profit of RM2 million and revenue of RM82.9 million in FY16.