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Friday, 23 June 2017

(The Star) George Kent sees good year ahead

PETALING JAYA: Engineering and metering company George Kent (M) Bhd is positive on its outlook and confident of recording another good year ahead with ample cashflow and a strong balance sheet.

“It is looking good so far. We recorded double-digit growth for the first quarter. It is progressing smoothly for the rest of the year. We expect this year to be a good year as well,” the company’s chairman Tan Sri Tan Kay Hock said at a press conference after its AGM.

“We need to wait until the second half of the year to get a clearer picture on whether we can achieve double-digit growth for the entire year,” he said.

The company delivered a strong set of financial results for the first quarter ended April 30 with earnings up 23.3% to RM18.49mil, while its order book has grown to RM6.1bil.

Its earnings rose from RM15mil a year ago. Earnings per share was at 4.9 sen compared with four sen a year ago. The company’s revenue, meanwhile, increased by 5.2% to RM129.42mil from RM122.96mil a year ago.

Its financial results were driven by the engineering and water metering business segments due to higher demand from both the local and export markets.

George Kent also said that in the first quarter, it had secured a major contract for the supply and delivery of water meters.

“Together with contracts secured by the engineering division in the last financial year, the order book has grown to RM6.1bil,” it said.

Tan said that the water meter division particularly “is doing great” based on the first quarter’s performance.

“In fact, the demand is so great that we are hard-pressed to deliver all our orders as we export to many countries,” he said.

Tan also said in the press release that the strong results in the first quarter set the foundation for the company to achieve another record year moving forward.

“We will continue to grow our already strong order book and deliver the projects in hand towards meeting our customers’ expectations and continue to improve shareholders’ value. The board is optimistic of financial year 2018, as our strong order book provides sustainable earnings visibility going forward,” he said.

Tan said the current order book could last the company for “many years” of up to seven years.

“We are very happy that even the Hong Kong government has chosen to source their water meters from us in Malaysia. Bear in mind that there are many alternatives available in neighbouring mainland China but they decided to buy from us,” Tan said.

He said capital expenditure this year would run into several million and it is an ongoing exercise.

The company, which presently derives some 80% of its revenue from the construction division, plans to switch its listing status to the construction sector from the trading and services sector on Bursa Malaysia. The sale of water meters contributes to the remainder of the revenue.