KUALA LUMPUR: Systech Bhd, which has a healthy cash reserve of RM5.87 million as at June 30, said it has spent a fair bit of its "war chest" for researching and developing new solutions with technologies such as blockchain. Speaking to SunBiz after its AGM yesterday, group CEO Raymond Tan said the company is a bit conservative when it comes to its cash at hand and having the reserve allows the company flexibility in terms of business expansion plans. The group has not declared dividends in view of the tough economic condition locally and in Southeast Asia. Last year, it completed the acquisition of a 49.99% stake in SysCode Sdn Bhd, a software development company specialising in the development of customised cloud-based business solutions, and a 51% equity interest in Singapore based Postlink Pte Ltd, a specialised business of Annual Report (AR) mailing and posting. With its new subsidiary, Systech is delving deeper into the development of blockchain based solutions such as smart contracts – a computer programme that directly controls the transfer of digital currencies/assets between parties once conditions under the contract are fulfilled. The group saw its net profit dip to RM203,000 for the financial year ended March 31, compared to the RM379,000 recorded in the previous year. The decline according to Tan is due to the acquisitions. For the first quarter ended June 30, the group's net profit rose by 93.36% to RM407,000 on the back of contributions from its direct and indirect subsidiaries. Revenue for the period grew to RM9.06 million from RM3.81million. "Last year in terms of profit we drop ... this year will be back on track," said Tan. He expects the newly acquired companies to drive earnings growth as both Postlink and Syscode are expected to start contributing. Systech is expecting equal contributions of one third each from its three business segments, namely e-business solutions, e-logistics, and cybersecurity. For the previous financial year, the e-business segment contributed 51% to the revenue followed by e-logistics at 26% and cybersecurity at 23%. On the impending Sales and Service Tax which is to come into force on Sept 1, Systech said it is yet to determine the implication of it on its business. Tan noted that it is less likely that the company will be impacted as 50% of its revenue is derived overseas.