The ratings reflected the group's proven track record as one of the leading jewellers in Malaysia and took into consideration DeGem's better than average financial profile characterised by its low gearing and favourable liquidity profile, MARC said in a statement.
Moderating factors include the inherent risks of the retail industry and price competition among the existing players.
DeGem's revenue increased 11.5% to RM114.01mil in the 2003 financial year, arising from the increase in domestic consumer spending, as well as the opening of new outlets during the year.
Operating margin grew to 18.1%, from 17.6% recorded previously.
Profit before tax jumped 14.6% to RM19.37mil in 2003 from RM16.91mil in the previous year. – Bernama
TruTech is principally involved in the contract assembly and manufacture of electronic products.
The rating watch reflected the potential changes in TruTech's business fundamentals and balance sheet as a result of its recently unveiled proposed restructuring scheme, RAM said in a statement.
On May 27, TruTech announced a series of proposed corporate exercises to address its financial frailty.
These include the incorporation of a new entity (Newco) as TruTech's holding company and the disposal of its existing contract assembly business to a third party.
Additionally, Newco will look at acquiring Renewed Development Sdn Bhd, a property development company, for RM280mil, via the issuance of Newco shares.
TruTech's outstanding debts would also be settled through the issuance of shares in Newco.
As at March 31, TruTech's debts amounted to RM83.4mil, of which RM42mil stemmed from the RULS.
The proposed scheme is still pending finalisation and approval from TruTech's shareholders.
Much of TruTech's future performance will depend on its ability to restructure its debts and resolve its financial woes. – Bernama
The ratings reflected the group's proven track record as one of the leading jewellers in Malaysia and took into consideration DeGem's better than average financial profile characterised by its low gearing and favourable liquidity profile, MARC said in a statement.
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