Compugates on track to turn a profit

> Shareholders approve its second property joint venture, private placement to raise RM13.5 million

PETALING JAYA: IT distributor Compugates Holdings Bhd, which received shareholders approval for its second property joint venture and a proposed private placement to raise RM13.5 million, is on track to return to profitability.

“These two resolutions will help to turn around the company. This project will unlock the value of our 62-acre (land) and we will use the proceeds raised for our gaharu (trees) business,” its managing director Goh Kheng Peow told reporters after its EGM yesterday.

The property project is a joint venture between Compugates’ 70%-owned subsubsidiary Compugates Development and Mining Sdn Bhd (CDMSB) and Jade Classic Sdn Bhd, for a seven-phase mixed development on 62 acres of land over 10 years. It has an estimated gross development value (GDV) of RM775 million, which is inclusive of Rumah Selangorku housing. The project is expected to be launched in 2020.

CDMSB is entitled to RM117 million of the RM775 million GDV. For the first phase of the project, it will receive RM10.9 million.

The proposed development comprises 500 houses, 1,100 Rumah Selangorku homes and three blocks of 600 units of high-rise mixed residential and commercial units.

Compugates, which is mainly involved in the distribution of consumer electronics, diversified into the property business in 2016, through a mixed commercial development on its 38-acre land in Dengkil.

Goh said he expects the property business to significantly boost the company’s growth next year with a contribution of more than 90% to its revenue.

“At the moment everything (the revenue) is still from the IT distribution segment,” he added.

Compugates’ net loss for the first quarter ended March 31, 2018 narrowed to RM1.39 million from RM1.74 million in the same period last year.

Goh said the lower net loss was mainly due to decreased in staff cost as a result of implementation of voluntary separation scheme in the third quarter last year. “We expect this trend to continue (in the next quarters of this year) given our costs reduction initiatives,” he added.

In 2009, the group diversified into agriculture and green renewable energy solutions by venturing into planting of “gaharu” trees in Perak and installation of green solar systems in Sabah.

The company has submitted several proposals for solar-based projects in Sabah worth over RM2 billion, on which it is yet to hear.

On Bursa Malaysia yesterday, Compugates closed 20% or half a sen higher at 3 sen on volume of 4.89 million shares.