Digistar eyes acquisitions

Lee :

KUALA LUMPUR: Digistar Corp Bhd is looking to jump-start and expand its central monitoring system (CMS) business through a series of acquisitions of other sizable players in the local market.

The information and communications technology (ICT) and property player made its first acquisition this week - a 70% stake in Protecs A & A CMS Sdn Bhd, which gave Digistar Corp immediate access to a customer base of 5,000.

Group chief executive officer Datuk Lee Wah Chong said the company was looking to acquire another two or three more CMS providers to increase its customer base, in line with its target to hit 500,000 subscriptions in five years.

“We are looking at some potential companies around Johor Bahru, Kuala Lumpur, Selangor and Penang. Hopefully, we can acquire another few companies with relatively big customer base within the next six months,” he said at a media conference.

Lee said the acquisition of Protecs, funded by internally-generated funds, will be positive on the group’s net asset and earnings for the coming financial year.

Protecs’s audited net assets stood at RM595,763 as at Dec 31 last year.

Lee said a 20% margin was likely in the first year of its CMS operation and the margins could go higher faster in the following years as the service was provided based on a subscription basis.

“The public have not warmed up to our CMS as they are still not familiar with what we are offering.

“We plan to aggressively amp up our marketing and promotion through multi-level marketing,” Lee said. Digistar’s CMS, Panther 911, was launched earlier this year.

It offers 24-hour undisrupted household or commercial building security monitoring via an Internet protocol-based platform.

The company spent RM5mil over the past two years to develop its CMS, including the set-up of four command centres in Kuala Lumpur, Penang, Malacca and Johor.

Lee said the security services business was poised to be the group’s main growth driver in the coming years.

The group is also keeping ears peeled for any project tenders from the Tan Sri Syed Mokhtar Albukhary-linked Media City development in Angkasapuri, Bukit Putra.

The RM860mil all-in-one media centre aims to revolutionise Radio Television Malaysia to be on par with its international counterparts.

“The Government wants to move our local terrestrial television stations onto the digital platform and we hope to be able to be part of that as we are the only Malaysian company to have the latest in broadcast technology right now,” an executive from the company said.

Digistar’s broadcast technology division provides expertise in designing, building and equipment provision for digital broadcasting facilities.

Lee said the group could turn around in the next financial year as Digistar expected significant improvement in revenue as its property development, The Heritage hotel, would be completed and the group could begin leasing the units out.

Digistar’s order book as at June 30, 2014 stood at RM250mil. It is also taking part in tenders worth RM600mil.

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