(From left): Vestland independent non-executive director Datuk Yong Lei Choo, Vestland executive director Wong Sai Kit, Liew, Vestland independent non-executive chairman Datuk Mathialakan Chelliah, Vestland independent non-executive director Ong Wei Liam and Vestland independent non-executive director Wee Chuen Lii.
PETALING JAYA: Vestland Bhd
, which debuted on the ACE Market of Bursa Malaysia with a 15% premium yesterday, intends to grow its revenue by about 30% for its financial year ending Dec 31, 2023 (FY23), owing to its substantial tender book and favourable win rate.
Listed under the construction sector, Vestland shares opened at 38 sen per share, representing a five-sen premium against its initial public offering (IPO) price of 33 sen.
Vestland closed at 39 sen yesterday. It was also the most actively traded stock with 352.11 million shares traded.
At a press conference following the listing exercise, Vestland group managing director Datuk Liew Foo Heen said Vestland’s tender book was about RM2bil, adding that the group was looking to realise some of it this year.
“For the first quarter of this year, we look to secure a few more contracts. I believe this year, we will be able to grow further. There will be a 30% to 40% growth, hopefully,” he said.
Liew believes Vestland’s listing in the capital market will provide greater visibility, access to a wider pool of investors and the ability to raise capital to drive its business forward.
“It also demonstrates the confidence that investors have in Vestland’s growth prospects and future potential, especially in the design and build industry.
“This is an exciting time for Vestland and we look forward to continuously delivering value to our shareholders as we move forward,” he said.
When asked if the group was looking to expand regionally, Liew said, as of now, the group would remain focused on the Malaysian market.
“I think, with the current order book and tenders, we are good enough to be seen in the Malaysian market,” he said, adding that the group had projects scattered across the country.
According to him, the group has projects in several states including Sabah, Johor, Penang, Perak, Pahang, Selangor and Kuala Lumpur.
For FY21, close to 83% of Vestland’s revenue was derived from private building projects, while the remaining 17% was contributed by government building projects.
On this, Liew believes that securing fewer government contracts would not be an issue for the group.
Liew said Vestland’s tender book was about RM2bil, adding the group was looking to realise some of it this year.
“We are well diversified. If you look at the tender book we have now, the private sector is growing very strongly, not only for residential and commercial but industrial buildings as well,” he said.
When asked if Vestland was eyeing a transfer to the Main Market, Liew said: “We definitely want to consider it. I think if our motto is going bigger, brighter and bolder, a bigger market is one of our targets.
“After listing, there is more work to catch up on and more contracts coming in. Definitely, we will discuss it with our board of directors,” he said.
As at Nov 28, 2022, Vestland had an unbilled order book of RM947.4mil.
On Jan 30, Vestland’s wholly-owned unit, Vestland Resources Sdn Bhd, bagged a RM63mil contract from Rimbun Merdu Sdn Bhd for the construction of a 33-storey serviced apartment and related facilities in Kuala Lumpur.
Vestland has been in the construction industry for 11 years.
In 2020, Vestland’s scope of work enlarged to become a design-and-build contractor, leading to better margins.
According to Liew, being a design-and-build contractor, there is more say overall, not only on design, but also material selection and construction method.
Liew pointed out that currently, over 60% of Vestland’s revenue came from the design-and-build segment.
Moving forward, he expects at least 70% of revenue to be contributed from this segment.
Liew highlighted that margins for its design-and-build segment is typically 2% to 3% higher than its traditional construction segment.
On its tender book win rate, Liew said for traditional construction contract vendors, the success rate will be below 50%, while for design-and-build contracts, the win rate is higher at 50% and above.
From the listing exercise, Vestland is expected to raise RM56.1mil.
