Protasco MD sees good potential in education sector

Protasco Bhd, which is seeking to list on the KLSE main board, sees good potential in the education sector with its Ikram College of Technology expected to be granted college university status soon, said managing director Chong Ket Pen. 

Protasco – predominantly a specialist road construction company – was extended an invitation by the education ministry in January to upgrade the status of Ikram College. 

As part of the upgrade, Ikram, which is sited on a 100-acre campus in Kajang, Selangor, will be renamed Kuala Lumpur Infrastructure College University which will offer private higher education studies specializing in civil engineering. 

“We hope to launch our university college very soon, probably in August. This will definitely contribute to our group's earnings,” Chong told AFX-Asia in an interview in Kuala Lumpur. 

Ikram's student population size had expanded to 1,400 and, at its current growth rate of 35–40% a year, student numbers could rise to 6,000 in four to five years, he added. 

A student population of 6,000 could generate RM60mil in annual turnover, which will translate to an additional RM10mil in net profit compared to the college's current net profit contribution of RM225,000. 

Apart from the potentially strong growth in student numbers, the education division generated higher profit margins, Chong said. 

The company's road works division is expected to maintain steady earnings from two government concession contracts and other ongoing road projects. 

The company has RM1.36bil worth of contracts in hand, which should last till 2005. 

Protasco has a 15-year to 2016 road maintenance contract which covers 50% of the federal road network and provides the company with a recurring turnover of some RM150mil–RM200mil a year. 

Another 15-year contract to 2011 is to provide the government with geotechnical service, soil testing, structural and material testing services, generating RM348mil in professional fees over the contract period. 

Protasco is one of the largest players in pavement recycling works, using recycling technology on rehabilitating and upgrading roads. 

Management sees the overall company's earnings per share growing at 8% a year over the next five years. 

“We want to be very conservative (in our projections) so that whenever we have extra, we will give shareholders surprises,” Chong said. 

In its initial public offering, Protasco is making an issue of 48.854 million new shares and offering for sale 19.6 million shares at an indicative issue/selling price of RM1.15. – AFX  

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