Censof’s regional growth plans intact with new MD

by **Cals** Mon 18 Aug 2014, 09:29

Business & Markets 2014

Written by Kamarul Anwar of theedgemalaysia.com

Monday, 18 August 2014 09:24

KUALA LUMPUR: Censof Holdings Bhd’s new group managing director Ameer Shaik Mydin has pledged to pick up from where his predecessor left off and continue with the group’s growth plans to expand its regional presence.

In the meantime, his predecessor Datuk Samsul Husin, the newly-designated Censof non-independent and non-executive director as of Aug 4, has been tasked to groom the business software provider’s subsidiary in Indonesia, as well as the group’s associate, Dagang NeXchange Bhd (DNex), formerly known as Time Engineering Bhd.

“We have a layout of what we want to do and we’re going to make sure we achieve all the plans, like going regional. We’re quite close in some deals,” Ameer told The Edge Financial Daily in an interview recently.

“We already have agreements to sell our products in the Philippines and the Middle East. As far as our regional plan is concerned, it’s on the right footing,” he said.

In the 15 months ended March 31, 2014 (FY14), Censof recognised revenue from its operating segments in Malaysia and Indonesia only, with the home country making up all but 3% of the group’s revenue of RM80.33 million.

While Ameer could not put a number on Censof’s target for overseas’ revenue contribution going forward, he said the sheer size of Indonesia alone is proof enough that the market has more potential.

“It has always been our aspiration to list our Indonesian unit (PT Praisindo Teknologi). All we have to do is to ensure that we grow its profitability to make it ‘listable’,” he said.

Praisindo Teknologi is 60%-owned by Censof and offers wealth management and investment management software systems. It boasts clients such as Indonesia’s BNP Paribas, PT Bank Negara Indonesia and PT AXA Financial Indonesia.

“We own the intellectual properties of our products. Thus, we are not just going to offer the wealth management and investment management software to the Indonesian market — they can be sold to other regional markets. It’s all a matter of putting in more effort to market ourselves and build the capacity,” Ameer said.

He added that with the political uncertainty in Indonesia over as the market-friendly President Joko Widodo comes in, he believes the country’s economy will grow further and that bodes well for Praisindo Teknologi.

And eventually Praisindo Teknologi will offer more products and services like the group’s financial management software solutions (FMSS), payment gateway solutions, and information and communication technology certification.

And Samsul is the man who will be behind Censof’s Indonesian expansion.

“People have asked why there was a sudden change in management. I feel the need to spend more time on the Indonesian business and grow it. Besides, I also want to focus on our new acquisition, DNex, of which I am deputy chairman,” said Samsul, who was present at the interview.

One reason why Censof could not put a number on the targeted revenue from Indonesia is because it is expecting a big boost in its Malaysian operations as DNex’s contributions will be recognised beginning in FY15.

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Ameer (left) with his predecessor Samsul.

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In FY14, Censof’s net profit plunged to RM1.11 million from the RM9.33 million recorded in FY12 ended Dec 31 because the group had acquired a 45.03% stake in DNex.

In a note to clients in May, Kenanga Research said Censof’s management is expecting revenue of between RM170 million and RM190 million in FY15, of which RM70 million to RM85 million will come from DNex and RM34.8 million from its FMSS segment’s outstanding order book.

However, it was bearish on Censof’s turnover, estimating the group will only rake in RM61.7 million, 23.19% lower than the previous 15 months, with a net profit forecast of RM15.3 million.

The research house, which last gave the group a target price of 53 sen, also announced that it was removing the stock from its core coverage given a lack of institutional interest in it.

But Ameer said the group is continuously marketing its stock to institutions. And he is upbeat as the group will be busy come year-end and early next year as more companies are rushing to upgrade their accounting software systems to be compliant with the impending goods and services tax (GST). The group supplies the GST-compliant software under its FMSS segment.

“Some people don’t realise the requirement for this [GST-compliant accounting software]. It’s still in the awareness stage.”

This was evident from Royal Malaysian Customs Department director-general Datuk Seri Khazali Ahmad’s revelation last Thursday that only 10,000 out of 300,000 companies that have to comply with GST have registered with them.

This article first appeared in The Edge Financial Daily, on August 18, 2014.

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