SCGM's 2Q net profit rises 57.6%, proposes 3 sen second interim dividend

by **Cals** Thu 10 Dec 2015, 00:53

SCGM's 2Q net profit rises 57.6%, proposes 3 sen second interim dividend

By Yimie Yong / theedgemarkets.com | December 9, 2015 : 9:14 PM MYT

KUALA LUMPUR (Dec 9): [size=16]SCGM Bhd ([You must be registered and logged in to see this image.] Valuation: 1.70, Fundamental: 2.60) posted a net profit of RM4.79 million in the second quarter ended Oct 31,2015 (2QFY16), an increase of 57.57% from RM3.04 million a year ago, helped by favourable product mix, lower fuel cost and strengthening of US dollar against ringgit.

According to a statement today, based on the enlarged share base of 132 million after the one-for-two bonus issue and 10% private placement, the earnings per share (EPS) rose to 3.6 sen, from 2.3 sen.

Revenue rose 30.63% to RM34.12 million, from RM26.12 million, as the sale of new products, plastic trays and plastic cups contributed to sales performance.

The thermo-vacuum form and vacuum plastic packaging manufacture has proposed a second interim dividend of 3 sen per share for the financial year ending Apr 30, 2016 (FY16), payable Jan 13, 2016.

The ex-date and the entitlement date falls on Dec 22 and Dec 28 respectively.

In a filing with Bursa today, the company said the profit before tax for the quarter was very commendable due to input cost, such as fuel cost, the impact of which on margins had trended downwards.

For the six months period (1HFY16), SCGM’s net profit grew 47.11% to RM9.68 million, from RM6.58 million. EPS rose to 7.3 sen, from 5 sen in 1HFY15, based on an enlarged share base of 132 million.

Revenue for 1HFY16 rose 19.4% to RM63.76 million, from RM53.4 million.

The company opined that the financial results will be stable over the remaining quarters of FY16, and believes its new product will increase the group sales.

In a statement today, SCGM said it intends to invest RM15 million over two years to increase its production capacity by 34% to 22.5 million kilogrammes per year, from 16.8 million kg per year presently.

SCGM said the investment for the new machinery would be funded by a portion of proceeds from the recently-completed private placement, which has raised gross proceeds of RM31.3 million.

The new machinery, comprising auto punching, press forming, extrusion and computer numerical control equipment, would be commissioned in stages. Upon completion, the enlarged capacity would begin contributing to group revenue in the financial year ending April 30, 2018(FY18).

In a separate filing with Bursa today, the company said that Datuk Seri Lee Hock Seng, 65, who was previously the managing director of SCGM, has been redesignated as the executive chairman, effective today.

Meanwhile, his brother, Datuk Seri Lee Hock Chai, 53, has been redesignated as the firm's managing director today. His previous position in the company was executive director.

Shares of SCGM closed 2 sen or 0.7% lower at RM2.82 today, for a market capitalisation of RM366.6 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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