KUALA LUMPUR (July 15): Point-of-sales solutions provider Artroniq Bhd, formerly known as Plastrade Technology Bhd, has proposed to diversify its business to include precision engineering and machinery parts manufacturing by acquiring a 60% stake in Penang-based Fujim Digital Sdn Bhd (FDSB) for RM12 million from the latter’s sole shareholder Teoh Boon Thiam.

In a filing with Bursa Malaysia, the group, which was previously involved in resin compound manufacturing until September 2020, proposed to settle half of the purchase consideration by cash and the remaining by way of issuance of new shares at an issue price to be determined later.

For the financial year ended April 30, 2022 (FY22), FDSB recorded an unaudited net profit of RM618,127, a significant jump from RM140,173 reported in FY21.

Artroniq said Teoh has agreed to provide a profit guarantee for FDSB to achieve at least RM2.1 million of net profit each for FY23 and FY24. 

The group said this diversification is in line with its strategy to reduce its reliance on a single business and to find new income sources.

Artroniq expects the acquisition to be completed by the fourth quarter of this year. Malacca Securities has been appointed as the adviser for the proposed diversification.

The group recently saw a change in leadership, with the appointment of Chin Yew Thong as its new managing director cum chief executive officer (CEO) on July 4, following the resignation of Leong Seng Kin as CEO on June 22.

For the first quarter ended March 31 this year, Artroniq recorded a net loss of RM555,000, versus a net profit of RM5.01 million a year ago, despite a 50% growth in revenue to RM62.73 million from RM41.74 million. 

The stock closed one sen or 2.1% lower at 45 sen per share on Friday (July 15), giving it a market capitalisation of RM143.02 million.

As at its closing on Friday, the counter had fallen 61.5% from its year-to-date peak of RM1.17 on April 12.

Author: The Edge Markets
Source credit: theedgemarkets.com