Published: Saturday August 3, 2013 MYT 12:00:00 AM
Updated: Saturday August 3, 2013 MYT 9:15:27 AM
SINCE listing more than two years ago, it’s safe to say that Censof Holdings Bhd has hardly had any major announcement that has taken the market by storm.
It however has had a steady flow of contracts.
Investors who appreciate the low-profile nature of this information technology (IT) solutions provider are probably a happy lot as the stock is up more than 50% from the beginning of the year, outperforming by leaps and bounds, the benchmark index, the FBM KLCI which is only up 6.45%.
Profit-wise, Censof has shown some improvements.
For the fiscal year ended Dec 31, 2012 Censof made a net profit of RM9.3mil on revenue of RM44.5mil compared to a net profit of RM8.8mil on revenue of RM43.4mil a year earlier.
 |
| A glance at its most recent balance sheet shows low borrowings, positive cash flow and about RM6mil in cash and cash equivalents. |
Industry observers point out that Censof is a beneficiary of Government jobs, going by the string of Government-related projects that it has obtained such as those from the Social Security Organisation (Socso), the Inland Revenue Board (IRB) and the Finance Ministry.
Group managing director Datuk Samsul Husin was once quoted as saying that Censof was not a politically-connected company.
Still, almost all of its jobs currently come from the Government.
Censof’s involvement as a financial management solutions provider to the Government and its agencies goes as far back as the mid-1990s coinciding with the Government’s plan to standardise the accounting software used across its agencies then.
 |
| Today, about 80 government agencies and 27 ministries reportedly use Censof’s software. |
Apart from new contracts, Censof also focuses on further upgrading and enhancing projects involving its current clients as an income generator.
Notably, Censof owns some of its intellectual property in the systems it deploys. This has helped it achieve decent net profit margins of around 30% in some of the projects that it embarks on.
Bidding for GST project
Now, its Government-related job segment could grow even further. Sources say the company is likely a front-runner for a sizeable contract in relation to the provision of Goods and Services Tax or GST software services nationwide.
There were reportedly four competitors in the bidding process for the mega project. The project, of course, depends on if and when the Government goes ahead to implement GST.
Censof’s focus on Government-related projects may not necessarily be a good thing if the projects stop being dished out to the company for some reason or other.
For this reason, Censof has also been reported to be on the lookout for jobs from the corporate side, both local and international.
Overseas profit contribution are relatively minute at the moment although the company has said recently that it managed to secure clients from countries like Australia and the United States.
Recently, it also said it was looking to tap into markets such as the Middle East and Africa, where there is demand for quality financial management solutions which is growing in tandem with global accounting standards.
Censof is 57.27% controlled by Censof Sdn Bhd, which is majority controlled by Samsul followed by chairman Tan Sri Mohd Ibrahim Mohd Zain who holds a 3.01% stake, according to Bloomberg.
At last look, Censof’s stock was at 53.5 sen, off its recent high of 64.5 sen.
Censof’s business is not only confined to its financial management solutions division. According to its 2012 annual report, its payment aggregate solutions division has rationalised its efforts to reposition its marketing activities toward the establishment of a one-stop payment and collection portal for statutory payments, to implement mobile payments and e-EA forms submission for income tax.
It has also gained “good market traction” in its wealth management solutions division and was awarded its maiden project locally in January 2012.
Under this division, it also managed to secure a project with the Federal Bank of Indonesia.
As for its training solutions division, boosted by newly acquired Knowledgecom Corp Sdn Bhd, Censof will focus on enhancing and growing talent using its e-learning platform.
KnowledgeCom specialises in solutions and training, IT business solutions, corporate IT training and management courses. It has developed various types of software and has trained over 800 companies in specialised information communication technology skills across Malaysia.
Censof recently proposed to issue redeemable convertible notes with an aggregate principal amount of up to RM100mil, which will be utilised by the company and its subsidiaries for future strategic acquisitions and/or repay any borrowings undertaken to fund the acquisitions.
Notably, Censof’s recurring income business model is somewhat like e-solutions provider MyEG Services Bhd whose stock has performed spectacularly thus far.
MyEG’s stock has risen to RM1.91 from 79 sen at the beginning year, up more than 140%.
The company does about 2.6 million road tax renewals and 50,000 motor insurance renewals per year via their IT platform.
No comments:
Post a Comment