PETALING JAYA: Kanger International Bhd is confident of returning to the black in the financial year ending March 31, 2022 (FY22), driven by the group’s new construction division.
Over the past one year, Kanger has embarked on several exercises to build a resilient business that focuses on growth and sustainability. The group expanded its sources of earnings from the manufacturing of bamboo flooring materials to the construction segment.
The group has secured construction projects which give a total order book of RM1 billion.
Kanger executive director Steven Kuah Choon Ching (pix) said the group will expand its construction business by undertaking building construction, civil engineering, and project management contracts as a main contractor or subcontractor.
“We also aim to secure the Grade 7 contractor licence from the Construction Industry Development Board which will enable us to undertake construction projects of any value,” he in a statement today.
The group’s acquisition of a 51% stake in building materials supplier Sung Master Holdings Sdn Bhd will be completed within the next month and will contribute positively to its financial performance and operational synergies by leveraging on Sung Master’s existing suppliers. It allows Kanger to source for building materials at relatively competitive prices to improve cost efficiencies when tendering for new construction contracts.
Kuah said the acquisition of Sung Master has been earnings-accretive and will bring an immediate positive impact to the group’s financial performance.
“Sung Master has consistently delivered a profitable performance over the past three financial years from financial year ended Jan 31, 2018 up to the audited 17-month financial period ended (FPE) June 30, 2020 and latest unaudited 10-month FPE April 30. Moreover, Sung Master even paid out dividends totalling RM25 million during this period.
“For the latest 10-month FPE April 30, Sung Master reported an unaudited profit after tax of RM11.8 million against revenue of RM76 million. For the FYE June 30, Sung Master is estimated to deliver a strong profit after tax and revenue of RM20 million and RM115 million respectively,” he said.
Kanger has proposed a renounceable rights issue with warrants on the basis of one rights share for every existing share, together with one free detachable warrant for every one rights share subscribed. At an issue price of 6 sen per rights share, the exercise could raise gross proceeds of up to RM20 million under the minimum case scenario and RM171.7 million under the maximum case scenario.
“The rights issue will enable shareholders to increase participation in the future direction of the group as we embark on investments and acquisitions that will propel the group to greater heights.”
