Censof growing quietly and steadily
PETALING JAYA: Information technology solutions provider Censof Holdings Bhd has been relatively quiet and has not created major waves in the market since its last acquisition in 2015.
Group managing director Ameer Shaik Mydin acknowledged that the group has been quiet but steadily growing.
“The last acquisition was in 2015 when we acquired Asian Business Software Solutions Pte Ltd (ABSS). In 2013, we acquired Dagang Nexchange Bhd (D Nex),” Ameer told Star Biz in an interview.
Censof had forked out RM 69.8mil for the acquisition of a 45% stake D Nex. It acquired ABSS for S$ 10mil (RM 28.06mil).
The lack of major news or catalyst could be a reason for its muted share price performance.
On the other hand, D Nex has attracted strong trading interests.
Censof shares ended last Friday at 27.5 sen, below its 52-week high of 42 sen, giving it a market capitalisation of RM 137.9mil. Although it has gained some 35% year-todate, it has fallen about 30% since early May.
Interestingly, Censof’s entire stake of 17% in D Nex is worth more than its entire market capitalisation.
Based on D Nex closing price of 47.5 sen, Censof’s stake is worth about RM 141.6mil.
Ameer said the group remained committed to its a vision of achieving a RM1bil market capitalisation by 2020.
“Organically, it will be challenging to hit the target. It remains a goal for us. We will get there,” he said, adding that the group was open to opportunities.
Censof has been cutting down its stake in D Nex and could be divesting more in the near future. In August 2016, Censof disposed of a 7.3% stake in D Ne X and its entire 19.6% holding of warrants for RM 32.3mil to pare down the groups borrowings.
“We may sell enough D Nex shares to pay up the loan we took for the acquisition. We have a balance of about RM 27mil loan. We have a bullet payment to make,” Ameer said.
The group has brought down its gearing ratio to 0.38 times.
Ameer disclosed that half of the company’s revenue currently was from government con- tracts while the remaining half was from the private sector.
For the financial year ended March 31, 2017 (FY17), Censof posted a net profit of RM 13.66mil compared with a net loss of RM 13.5mil in the same period a year ago.
Its revenue for the period stood at RM 146.56mil against RM 165.04mil previously.
In the first quarter ended June 30, 2017, it posted a net profit of RM 1.24mil on revenue of RM 17.4mil.
Ameer explained that for its performance in FY17, the group recognised two quarters of contributions from D Nex as a subsidiary while the remaining two quarters as an associate after Censof pared down its stake in D Nex.
Going forward, Ameer said the group expected a double-digit growth in revenue underpinned by growth in its training services unit and Financio, a cloud computing accounting software.
He said all its business division were growing but growth from these two divisions was expected to be stronger.
He said Financio, targeted at start-ups and small businesses, would enhance the group’s recurring revenue visibility. Financio will be launched in Singapore, Hong Kong, the Philippines and Indonesia soon.
Ameer said the group has completed the financial management solutions for the whole industry ranging from government to micro and small businesses.
“It is growing. We launched this in April and have a sizeable number of clients using the Financio,” he said, adding that the industry was also moving towards cloud based.