Censof rides on govt and business digital efforts

Speaking with StarBizWeek, group managing director Ameer Shaik Mydin (pic) says the group plans to secure 10 to 15 government agency clients every year, moving forward.

SOFTWARE solutions provider Censof Holdings Bhd has built a strong footprint in the government sector, with 86 out of 139 government statutory bodies as its clients.

Some of them such as the Inland Revenue Board, SIRIM Bhd and Farmers’ Organisation Authority have been with Censof for over 25 years.

Censof also serves six to seven local councils across Malaysia, out of the total 140 councils.

It is noteworthy that government contracts have been contributing more than two-thirds of the group’s revenue.

Regardless, Censof says there remains huge opportunities that are still untapped.

This is amid the government’s MyDigital initiative, which targets 80% cloud storage across the public service and all payments for government services to be made cashless by 2022.

Speaking with StarBizWeek, group managing director Ameer Shaik Mydin (pic) says the group plans to secure 10 to 15 government agency clients every year, moving forward.

“We have over 100 state government agencies that we can serve as they need to comply with the Standard Accounting System for Government Agencies (Saga) criteria, which presents a really big opportunity for us.

Censof logoCensof logo

“We offer a total of nine solutions to the government sector, which includes e-procurement software, tax compliance system, data-sharing platform and performance-based budget system,” he says.

Ameer is the single-largest shareholder in Censof, with a direct and indirect stake of 0.26% and 31.86%, respectively.

This year alone, Censof has bagged three contracts cumulatively worth RM31.4mil from the Finance Ministry, Transport Ministry and Kuala Lumpur City Hall.

With all government agencies required to move their payment collection online, Ameer says Censof’s payment aggregation solutions will start generating revenue.

This would be achieved through Censof’s new partnership with Kiple-Pay, via the launch of the BayarNow mobile application for statutory bodies to connect and facilitate customers to integrate online collections with Censof’s Saga compliance accounting system.

Cloud system

In addition, the public sector’s shift to cloud-based systems is another growth area for Censof, simply by tapping on its existing clients.

To date, Censof says about 42% of its 86 government statutory body clients have migrated onto its cloud system.

On Dec 7, Censof signed a joint-venture (JV) agreement with South Korea’s Cloocus Co Ltd to augment its cloud business.

The JV will develop and operate a “hyperscale” (Microsoft Azure) cloud management in Malaysia, in addition to the Microsoft business, including MW: Modern Work and Biz Apps.

Cloud solutions is one of the emerging digital technologies services that Censof is embarking into, apart from robotic process automation and peer-to-peer (P2P) lending, to name a few.

Censof gained a foothold in the P2P lending space via the acquisition of a 10% equity stake in MoneySave, which essentially made Censof the cornerstone investor.

“Going forward, at the very least, we are confident of maintaining our current profitability as the pandemic has expedited digitalisation transformation.

“A healthy stable recurring income coming from our Financial Management Solutions – Government (FMS-G) segment of about RM45mil and about RM15mil from the Financial Management Solutions – Commercial & SME (FMS-C & SME) segment on a yearly basis, along with lower finance cost, will be the key drivers in sustaining our profit after tax margin,” says Ameer.

In the first half ended Sept 30, Censof’s profit after tax margin was recorded at almost 11%, with a profit after tax of RM4.82mil against a revenue of RM43.9mil.

“Overall, we will continue to grow and cater for all segments in the market, from the government sectors to larger corporations, small and medium enterprises (SMEs), micro-SMEs and startups,” says Ameer.

Within the private sector, Censof sees huge opportunities among the SMEs in South-East Asia, considering that SMEs make up more than 96% of all enterprises in the region.

For this segment, Censof says it focuses mainly on the ABSS accounting software solutions, Financio and Acumatica.

ABSS primarily caters for the SMEs, while Financio is the cloud accounting software designed by ABSS for small business owners.

Acumatica, on the other hand, is a cloud-based platform under the ambit of Netsense, catering for corporates.

Higher stakes

In April this year, Censof’s shareholding in ABSS was increased to 89.07% from 30.87%.

“In terms of the commercial and SME sectors, we are equipped with the required resources, whereby we are capable of maintaining and customising the products according to the specified requirements in other countries such as Singapore and Hong Kong.

“Generally, banks prefer to work with us as we are able to adapt and integrate their solutions to the required requirements. Foreign providers do not usually offer such customisation services.

“Our products are developed and built in-house, of which the intellectual property is owned by Censof,” Ameer says.

Currently, Censof is supported by its project-basis order book of RM29.8mil, while its maintenance order book is worth RM43.4mil as at Oct 31.

“Our tender book is usually three times our annual revenue,” Ameer points out.

The group is also supported by its net cash position, with cash and cash equivalents of RM22.1mil against zero borrowings.

With zero-gearing ratio, Ameer says the group has a better financial flexibility to explore investment opportunities and develop unique products and solutions via strategic alliances in new business segments.

“We constantly explore for viable acquisitions, partnerships and mergers with new partners,” he adds.

Censof staged a turnaround in the financial year ended March 31, 2021, with a net profit of RM26.8mil.

In comparison, the group recorded a net loss of RM72.4mil in the previous financial year.

This was mainly due to the loss incurred from Censof’s investment in Dagang Nexchange Bhd (DNeX), after the former suffered a force-selling of DNeX shares last year.

“With the absence of this investment, we are optimistic that we will be able to sustain our profitability, going forward.

“Based on the various initiatives by the government to adopt digitalisation transformation, we are confident that we will be able to maintain our current profitability or even perform better in future.

“Aside from that, the pandemic has inevitably expedited digitalisation transformation,” says Ameer.

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