SKH eyes diversification of business

PETALING JAYA: SKH Consortium Bhd has proposed to undertake a diversification of its existing business to include property development and property investment.
As part of its diversification plan, SKH entered into a share sale agreement (SSA) with Smart Wisdom Sdn Bhd to acquire a 80% stake in Kepayang Heights Sdn Bhd (KHSB) for RM13.6 million cash, which provides SKH an opportunity to accumulate land bank for future property development projects, as KHSB owns a land in Bentong, Pahang.
SKH also entered into a SSA with Bijak Fajar Sdn Bhd and Newston Development Sdn Bhd to acquire a 70% stake in Rimbun Gabungan Sdn Bhd for RM12 million cash, to undertake an affordable housing development project on land in Setapak, Kuala Lumpur.
Considering prospects of the property market in Malaysia, the board anticipates that the property development and investment segments are expected to contribute 25% or more of the net assets and/or 25% or more of the net profits of the group for FY2019.
SKH is an investment holding company and the group is principally involved in the trading of information technology (IT) and information and communication technology (ICT) related products, as an electronic commerce provider and facilitator, provision of software development and support services, and property construction and its related business.
The group derives most of its revenue from its IT and ICT business. Considering the increasingly competitive market in the ICT industry in which the group operates, the board anticipates that future prospects of the ICT segment will continue to be challenging.
Hence, the proposed diversification will enable the group to diversify into new business segments, which will provide additional streams of revenue and to complement with the group’s existing construction business.
“The board believes that this will be part of the group’s business plan to improve its financial performance as well as its shareholders’ value. In addition, the proposed diversification will allow the group to reduce reliance on its existing business in the IT and ICT industries as well as its construction activities,” SKH said, adding that an EGM would be called for shareholders approval of its plans. The board expects the proposed diversification to be completed in the second half of the year.