Hot Stock RCE Capital shares rise after improved results, proposed capital repayment

by **Cals** Sat 07 Nov 2015, 02:25

Hot Stock

[size=28]RCE Capital shares rise after improved results, proposed capital repayment

By Ahmad Naqib Idris / theedgemarkets.com | November 6, 2015 : 11:14 AM MYT

KUALA LUMPUR (Nov 6): Non-bank financial service provider RCE Capital Bhd ([You must be registered and logged in to see this image.] Valuation: 2.00, Fundamental: 1.25) saw its share price rise as much as 10% in early trading today.

As at 10.46am, RCE's share price gained 1.5 sen or 5% to 31.5 sen, with some 16.7 million shares exchanging hands, placing it among the top actives on the exchange. Earlier, the counter gained as much as 3 sen or 10% to reach an intraday high of 33 sen.

The group reported yesterday (Nov 5) an improved performance for its second financial quarter ended Sept 30, 2015 (2QFY16), and had proposed a capital repayment exercise.

The company posted net profit growth of 81% to RM10.22 million or 0.8 sen per share for 2QFY16, from RM5.65 million or 0.5 sen per share, on lower other operating expenses and higher net interest income.

Revenue for the quarter rose 21% to RM39.04 million, from RM32.35 million.

For the cumulative half-year period, RCE’s net profit rose 57% to RM19.65 million or 1.54 sen per share, from RM12.52 million or 1.1 sen per share a year earlier.

In a separate filing, the company proposed a capital repayment of up to RM98.3 million or 7.5 sen per share, via a proposed share capital reduction.

It also proposed a share consolidation of every four shares of 2.5 sen into one share of 10 sen each, after the share capital reduction.

It said the corporate exercise is expected to improve the company’s earnings per share, net assets per share and return on equity of the group.

Following the completion capital repayment exercise, the par value of each RCE share will be reduced from 10 sen to 2.5 sen.

The cash distribution for the capital repayment will be funded via RCE's internal funds.

(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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