KUALA LUMPUR: Construction services group Tuju Setia Bhd is expecting business to recover to pre Covid-19 levels in 2021, based on its RM953.1mil order book as at end-March, according to managing director Wee Eng Kong.(pic)
“We will be busy in 2021. We are seeing figures similar to 2019, before the pandemic, ” said Wee after the launch of the group’s initial public offering (IPO) prospectus here yesterday.
Also present was Alliance Investment Bank Bhd head of corporate finance Tee Kok Wah, who pointed out that from the latest order book, RM355mil is expected to be recognised for the last three quarters of 2021.
“This already exceeds the group’s RM256mil revenue in 2020, and this does not even include the revenue for the first quarter of 2021, ” explained Tee.
Wee also said the group’s latest order book would sustain its earnings till 2024, and it has a tender book of RM4bil.
According to the IPO prospectus, for the financial year ended Dec 31,2020 (FY20), the group posted a 39.34% year-on-year (y-o-y) drop in revenue to RM255.77mil (FY19: RM421.64mil) due to a general slowdown of the construction industry coupled with the completion of a number of projects.
In FY20, the group posted a 4.61% y-o-y increase in profit after tax to RM16.27mil (FY19: RM15.55mil) due to a net gain on impairment of RM6mil, coupled with an improvement in the gross profit margin of the design and construction segment.
Regarding its dividend policy, Wee said the group aims to distribute 25% of its annual net profit to reward shareholders.
“Tuju Setia’s track record as a main contractor and builder of choice is built on our core values of selecting a reputable clientele, having strong technical expertise and achieving quality accreditations.
“These strong fundamentals enabled Tuju Setia to persevere despite the challenging 2020.
“Not only did we achieve meaningful progress in our existing projects, but also won new mandates from trusted developers, ” he said.
Since its set-up in 2006, Tuju Setia has completed 18 high-rise projects of up to 51 levels with a contract value of RM2.23bil.
Wee added that the IPO will enhance Tuju Setia’s current core competencies and improve the group’s capacity in constructing high-rise buildings, and design and construction of hospitals and healthcare facilities.
Tuju Setia’s order book comprises projects such as Mutiara Central Office Suites (Cheras), Riana Dutamas – Phase 2 (Segambut), The Pulse Residence (Bandar Puteri Puchong) and 121 Residences (Petaling Jaya), PPAM SofiyaResidensi (DesaParkCity), Emerald Hills – Phase 3 and 4 (Cheras), Tuai Residence (Setia Alam) and the Kajang Women and Children Hospital.
The group’s clientele includes S P Setia Bhd, IJM Bhd, Bandar Raya Development Bhd, Perdana ParkCity Sdn Bhd, UEM Sunrise Bhd, Symphony Life Bhd, Guocoland (Malaysia) Bhd and the Malaysian Public Works Department (JKR).
Tuju Setia aims to raise RM56mil from its IPO on the Main Market.
From the IPO proceeds, RM32mil will be for capital expenditure such as buying new construction machinery and equipment, and building information modelling (BIM) system software to upskill design and construction activities, as well as buying land and constructing new storage facilities for better organisation and utilisation of machinery and equipment and improve efficiency of maintenance works.
Another RM19mil will be for working capital, and RM5mil to defray listing expenses.
Tuju Setia’s IPO involves a public issuance of 80 million new shares priced at 70 sen apiece, along with an offer for sale of 27 million existing shares.
Of the 80 million new shares, 15.9 million shares will be for the Malaysian public via balloting, and 6.3 million shares will be for application by the group’s eligible directors, employees and persons who have contributed to its success.
Another 31.7 million shares will be made available via private placement to selected bumiputra investors approved by the Ministry of International Trade and Industry.
The balance 26.1 million new shares, together with 27 million existing offer-for-sale shares, will be placed out to selected investors via private placement.
Applications for Tuju Setia’s IPO will close on May 5,2021 at 5pm.
Tuju Setia is slated to list on the Main Market on May 19,2021.
Alliance Investment Bank Bhd is the principal adviser to Tuju Setia’s IPO exercise, as well as joint underwriter and joint placement agent, together with CIMB Investment Bank Bhd.