‘We’ve emerged as a dividend play among savvy investors.’

HENRY TEOH SENG HEE, ELK-Desa Resources Bhd executive director/chief financial officer

KUALA LUMPUR: ELK-Desa Resources Bhd, which provides loans for the second hand car market, expects a steady performance that will continue to yield dividend of more than five per cent to shareholders.

“We’ve emerged as a dividend play among savvy investors. For the past three years, we’ve paid out dividend, with yields surpassing five per cent a year,” said executive director and chief financial officer Henry Teoh Seng Hee.

ELK-Desa’s profit rose 13 per cent to RM25.92 million in the last financial year ended March. This was on the back of 10 per cent rise in revenue to RM104.13 million, from a year ago.

ELK-Desa’s management has so far been able to keep its nonperforming loan rate below one per cent.

He attributed it to the company’s “consistent and robust follow-up in credit recovery”.

“In the last five years, our business grew 15 per cent per year. We are seeing continued growth momentum in the current year ending March next year,” he said after the shareholders’ meeting, here, yesterday.

He said ELK-Desa’s customer base of 35,000, which amounted to about RM400 million of net hire purchase receivables, was expected to grow by between 10 and 15 per cent this year.

On whether the current threemonth tax holiday had an impact on ELK-Desa’s car loan business, he said it was business as usual.

“While many people buy new cars and trade in old cars during this three-month tax holiday, there’s continued growth momentum in our business. We serve a niche category of middleincome earning consumers in the Klang Valley,” he said.

On whether ELK-Desa had plans to diversify into other related businesses to boost income stream, he said the group had last year secured a money lending licence from the Housing and Local Government Ministry.

“We have the money lending licence but we have yet to activate this business,” he said.

ELK-Desa is a family-run company led by founder and executive chairman Teoh Hock Chai, its single largest shareholder with a 38 per cent stake as at June.

The second generation are 36year-old Seng Hee and his two older brothers — Seng Hui is chief executive officer and group executive director while Seng Kar is non-independent non-executive director in ELK-Desa.