Prestariang banking on homegrown titles for growth
utk short term profit, prestariang..utk long term profit, BA..
p/s: x kira pistol, senapang atau meriam; yg pentingnya anda SNIPER..
CYBERJAYA: Main Market-bound Prestariang Bhd is banking on its homegrown titles to steer the group to higher profitability in the coming years.
Prestariang has two main core businesses. It
provides ICT training and certifications for graduates and working adults to operate programmes such as Microsoft Office, Autodesk and Adobe and distributes software licences.
CEO Dr Abu Hasan Ismail said the company plans to
invest in developing its IC Citizen training programme and other in-house titles which command higher profit margins.
“We intend to grow our own certification programmes such as IC Citizen and other new titles. These titles promise margins of at least 50%,” Abu Hasan told The Edge Financial Daily in a recent interview.
IC Citizen was launched last year in Brunei and Abu Hasan said it will play an important role in growing the company’s revenue. It is a training and certification programme focusing on Internet etiquette.
“The response to IC Citizen has been good and we will launch it with our partner Certiport Inc in the Middle East, Southeast Asia and North America,” said Abu Hasan.
He said Prestariang will leverage on Certiport’s network of 10,000 training centres in 142 countries. It is
a leading certification solutions provider for Microsoft Office, Adobe, and ComTIA Strata.
After the listing, Prestariang is planning to launch other in-house certification programmes for application in Islamic finance, vocational English and green IT after the listing.
Last year, ICT training and certification contributed RM23.1 million or 40% to the group’s total revenue. Its software licence distribution and management division contributed RM35.5 million or 60%. In terms of gross profit, ICT training contributed 55% and software distribution 44.6%.
The group has recorded steady growth in the last few years. Its profit after tax tripled to RM15.12 million in FY10 ended Dec 31, from RM5.32 million four years earlier. Revenue fell marginally to RM58.5 million from RM63.85 million, but the group performed better due to better margins
Abu Hasan noted that the ICT training and certification division’s gross profit margin has risen to 57.2% last year from 12.83% in 2006.
Abu Hasan: We intend to grow our own certification programmes such as IC Citizen. These titles promise margins of at least 50%.
“We expect margins to be at least 50% moving forward,” he said.
The average gross profit margins for the ICT training and certification division in the past three years were 50.3%, compared with 34.3% for software licence distribution and management.
Prestariang has an
order book of RM145.3 million, which will keep it busy for the next three to five years. “We plan to double the order book with the launch of IC Citizen [in new markets] this year,” Abu Hasan said.
Prestariang’s major project is the Program Pentauliahan Professional (3P) certification programme, which provides ICT training to final year students in public universities here. The contract is due to be renewed for another four years until 2016.
Prestariang also conducts ICT training and certification programmes for civil servants with the various ministries. Note that
90% of its revenue last year was derived from the government.
“We realise that this could be our weakness ... We have plans to increase contributions from the private sector and to be less government-dependent,” said Abu Hasan.
For 1QFY11 ended March 31, Prestariang posted a net profit of RM11.3 million on the back of RM37 million in revenue.
The company launched its initial public offering (IPO) prospectus on June 28 and is scheduled to debut on Bursa on July 27.
The IPO entails a public issue of 22 million shares, and an offer-for-sale of 77 million shares at 90 sen per share. The offer-for-sale allocation consists of eight million shares offered to the public via balloting, 22 million shares for bumiputera investors subject to Ministry of International Trade and Industry’s (MITI) approval, 40 million for selected non-bumiputera investors, and seven million for pink form subscribers.
Abu Hasan said the private placement was very well received by institutional investors.
“Ten institutions have participated in the private placement and about 70% of the MITI portion has been taken up by institutional investors,” he said.
Post-listing, Abu Hasan will hold a 41.2% indirect stake in the company via private investment vehicles, while Kumpulan Modal Perdana Sdn Bhd (KMP) will hold 9.48%.
“KMP has been a substantial shareholder in the company since 2007. They are committed to remain [as long-term investors] after the listing as they believe in our business,” said Abu Hasan.
Abu Hasan said KMP had enjoyed good dividends in the past few years and shareholders could expect more in the future.
“We intend to declare
dividends of up to 50% of profit in the next three years,” he said.
Out of the RM19.8 million raised from the IPO, Prestariang plans to invest RM1.5 million to set up training centres in Penang, Johor and Sarawak, RM1 million to upgrade its backdoor systems, and RM6.5 million for R&D expenditure.
“We plan to invest about RM4.5 million [from the R&D portion] to develop our new titles and RM1 million to develop our own training management system and another RM1 million to develop our own propriety test systems,” said Abu Hasan.
He added that RM6.2 million has been earmarked for working capital, with the remainder to be set aside for term loan repayments and listing expenses.
He said the company has
no borrowings and as at March 31, 2010, it had RM29.59 million in cash and bank balances.
“I believe in
cash as it allows flexibility for expansion. We are also open to the
possibility of mergers and acquisitions in the future,” he said.
AmInvestment Bank Group is the adviser, sole underwriter and placement agent for Prestariang.
This article appeared in The Edge Financial Daily, July 7, 2011.
