Crest Builder wins RM65mil contracts


  • Business
  • Thursday, 24 Apr 2003

BY LEE KAR YEAN

Crest Builder Holdings Bhd, soon to be listed on the KLSE main board via MGR Corp Bhd, has boosted its order book to RM508mil by securing two more construction projects worth RM65mil. 

The contracts are for the construction of staff quarters worth RM24mil at Universiti Tenaga Nasional in Sepang and for renovation work worth RM41mil on Amcorp's serviced suites and office suites in Petaling Jaya, according to Crest Builder director Alex Kam Yong Kan. 

Kam said the company's order book would keep it busy for the next 18 to 30 months. He said the company had tendered for other civil engineering and construction projects to the tune of about RM500mil, mainly on the west coast of the Peninsula. 

“We are looking at success rates of between 25% and 30% in getting the projects we have tendered for. Some of the projects were offered to us by invitation,” he said after the launch of the company's prospectus in Kuala Lumpur yesterday. The company, which has completed projects worth over RM1bil so far, is targeting at a listing in mid-June. 

Kam said Crest Builder might need to revise upwards the profit projection of the group in view of the latest contracts secured. The company has made a pre-tax profit forecast of RM21mil for its current financial year ending Dec 31. 

“We will focus on construction projects in the range of between RM10mil and RM80mil, as they are easier to manage compared with bigger projects. And the profit margins are better. 

“There is no point for us to go for mega projects when the profit margins are squeezed sometimes to 8% or below. We are getting a profit margin of about 16% for the specialised construction projects that we carry out,” he said. 

At the launch of the Crest Builder prospectus. From left: Crest Builder chairman Tengku Datuk Sulaiman Shah, AmMerchant director/head of corporate finance Pushpa Rajadurai and Yong Soon Chow.

Crest Builder will assume the listed status of second board company MGR Corp Bhd, which is undergoing a restructuring. Having met the main board track record, however, Crest Builder will go straight to that board. 

The flotation of Crest Builder entails a public offer and private placement of 16.2 million shares. Also for sale are RM100,000 irredeemable convertible unsecured loan stocks (Iculs) and RM100,000 redeemable convertible unsecured loan stocks (RCULS) for Crest Builder employees, and warrants to the company's shareholders. 

The Crest Builder group's core business is in general construction, focusing on infrastructure and building works. 

About 90% of the construction projects carried out by the group comprised those undertaken by the government or quasi-government bodies including the Public Works Department, Kuala Lumpur City Hall, Tenaga Nasional Bhd and Universiti Teknologi Mara. 

Meanwhile, Crest Builder managing director Yong Soon Chow said the outlook for the construction industry was still positive, despite the impact of the war in Iraq and the threat posed by the Severe Acute Respiratory Syndrome outbreak. 

“Our economy will still grow and I especially laud the government's move to focus on priority construction projects. This is good for us as we are one of the beneficiaries of the RM9.1bil allocation for public amenities under Budget 2003,” he said.  

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