Glostrext managing director Lee Sieng Kai (sixth from left) with other members of the board of directors, M&A Equity Holdings Bhd managing director Datuk Bill Tan (eighth from left) and other representatives from M&A
KUALA LUMPUR: Glostrext Bhd
made its start on the ACE Market of Bursa Malaysia at 65 sen a share, a 46 sen surge over its initial public offering price of 19 sen a share.
The share topped the list of most actively traded counters on Bursa Malaysia with 11.84 million shares at the opening bell.
Glostrext, a geotechnical instrumentation and testing specialist raisd RM20.1mil in proceeds from its IPO, the bulk of which will go towards its expansion plans.
The company said it plans to use RM11.7mil or 58.2% of the proceeds to expand its structural and ground instrumentation and monitoring business into Singapore, as well as for working capital.
“In Singapore, growth in the government’s allocation for the transport subsector from S$5.33bil in 2020 to a high of S$9.42bil in 2023, of which more than 40% is allocated for expansion of rail network and related projects, serves as a strong base for continued demand for geotechnical instrumentation and testing services moving forward.
“Under the Building Control Regulations 2003, pile load testing is mandatory and geotechnical monitoring is required for all construction of buildings and infrastructure in Singapore. We believe that we will be well-positioned to benefit from these requirements to secure sales and further grow our business in Singapore,” said Glostrext managing director Lee Sieng Kai in a statement.
A further RM1.8mill (9%) of the proceeds will be used to fund the research and development activities to further enhance the automation and accuracy of its service offerings.
The remainder of the proceeds will be used to repay bank borrowings amounting to RM3.3mil (16.4%) and to defray the estimated listing expenses of RM3.3mil (16.4%).
Based on the enlarged share capital of 407 million shares, Glostrext had a market capitalisation of RM77.3mil upon listing.
In its recently announced results, Glostrext posted a net profit of RM1.46mil on the back of RM6.43mil revenue in the first quarter of its financial year ended 1Q24.
Lee said the company’s revenue for 1Q024 came mainly from its pile instrumentation and static load test services as well as structural and ground instrumentation and monitoring services segments, which accounted for RM5.37mil and RM940,000, representing 83.5% and 14.6% respectively.
