ECM Libra Bhd recorded net profit of RM40.3mil for the year ended March 31, a turnaround from a loss of RM10.6mil in the previous year.
The turnaround was due to the change of its business direction from a manufacturing concern to a financial services group involved in corporate finance, stock broking, offshore investment banking and fund management activities, the company said.
ECM Libra, previously known as South Peninsular Industries Bhd, said its revenue increased 84.1% to RM73.2mil from RM39.75mil previously.
Financial advisory fees and equities accounted for 43% and 35% of revenue respectively, with interest and investment income comprising the balance, it said in a statement.
Basic earnings per share for the year were 9.32 sen, turning around from a loss of 15.6 sen in the preceding year, it said.
Group shareholders' funds stood at RM578.3mil, it added.
The group’s stock broking subsidiary maintained its strong capital adequacy ratio (CAR) of 7.3, well above the minimum CAR requirement of 1.2, allowing the group significant room for new business initiatives.
ECM Libra said it was well positioned to exploit further investment opportunities as it had a strong balance sheet and RM176mil in cash and liquid assets. The company proposes a final gross dividend of 5 sen per share to its shareholders, taking the payout ratio for the year to 53% of total earnings.
The group’s dividend policy is to target a payout ratio of 50% to 60% of net profits.
Meanwhile, ECM Libra said a challenging economic outlook, increased competition from the entry of foreign brokers and cost pressures, will pose significant challenges for the group in the year ahead.
Chief executive officer Lim Kian Onn said the group will continue to focus on areas where it had a strong competitive niche to building new profit growth areas such as structured products, debt capital market activities and private wealth management. – Bernama