by NG MIN SHEN / Pic by ISMAIL CHE RUS
Vizione Holdings Bhd is confident of doubling its revenue for the financial year ending May 31, 2018 (FY18), after obtaining shareholder approval to acquire (M) Sdn Bhd (WSSB) for RM280 million.
Its MD Datuk Ng Aun Hooi said the company should be able to “more than double” its revenue in FY18 as WSSB has unconditionally guaranteed an aggregate profit after tax contribution of RM82 million for the financial years ending Dec 31, 2017, and Dec 31, 2018.
“The acquisition of WSSB will further enhance our construction earnings. After doubling our revenue for FY18, achieving revenue growth of 5% to 10% should not be a problem after that,” he told reporters after the company’s EGM in Kuala Lumpur yesterday.
The company posted a net profit of RM578,000 in FY17, higher than RM113,000 recorded the year earlier. Its revenue in FY17 stood at RM49.1 million versus RM36.71 million a year ago.
Comparatively, it posted a net loss of RM916,000 and RM25 million in FY15 and FY13 respectively. Meanwhile, WSSB is mainly engaged in building and civil engineering as well as construction, and has been involved in constructing low and affordable homes over the last 16 years.
Vizione’s total orderbook balance post-WSSB acquisition stands at about RM3 billion, which will last until 2021.
It is also in the process of tendering for some RM1.5 billion worth of projects, mostly in the infrastructure and housing segments.
“High-end projects are not easy to sell now due to difficulty in securing end financing, so we are targeting government and private projects, mostly for affordable housing. We have a success rate of about 40% to 50%,” Ng said.
The company is focusing on constructing affordable housing projects as it believes the government will continue to initiate such developments to meet demand.
“In these two years we can expect to see a lot of affordable housing projects. More than 90% of our focus will be on construction, while we will also explore some smaller-scale property development projects by working closely with, or through joint ventures with landowners,” Ng said.
Shareholders approved the proposed acquisition at the EGM yesterday. The acquisition of WSSB is to be satisfied via a combination of cash and issuance of new ordinary shares of Vizione to be issued at 11 sen per share.
Vizione has proposed to undertake a private placement of up to 1.687 million shares to fund the cash consideration, with the placement price to be determined later.
Ng said the company is expecting institutional investors to take part in the private placement as the firm’s market capitalisation will increase from some RM100 million presently, to about RM400 million after acquiring WSSB.
“We have approached two big funds, but we are not sure yet if they will come in or not,” he said. The names of the funds were not revealed.
Vizione, formerly known as Astral Supreme Bhd, was previously involved in the manufacturing, assembly and export of electronics and electrical products. After divesting its loss-making electronics manufacturing units, the company in January last year diversified its principal activities to include construction, property development and property investment.