Datapulse back in the black in Q2 after selling its core manufacturing site

EMBATTLED disk drive maker Datapulse Technology was back in the black in the second quarter, on the sale of its former manufacturing headquarters, it announced on Thursday.

Net profit was S$38.1 million for the three months to Jan 31 - a turnaround from the loss of S$698,000 in the same period the year before.

Meanwhile, revenue grew by 58 per cent year on year to S$4.5 million.

The group said that the increase was mainly due to turnover of S$1.3 million from a one-off special project with a customer.

Another S$200,000 in revenue came from newly acquired subsidiary Wayco Manufacturing, a Malaysian personal care product manufacturer acquired for S$3.5 million in December 2017.

Datapulse's recently appointed board has said that the business diversification was needed, after predecessors approved the disposal of the company's media storage manufacturing premises in Tai Seng.

The sale of the leasehold property netted a bumper S$44.6 million gain for the quarter but left Datapulse unable to carry on with the disk drive business, the company has said.

A special cash dividend of one Singapore cent a share was proposed in January to go with the gain from the property sale. But besides that, no dividend was proposed for the quarter.

Earnings per share stood at 17.4 Singapore cents for the quarter, compared with a loss per share of 0.32 Singapore cent previously.

The group's financial position "remained healthy", with a net cash position of S$87.1 million as at Jan 31, it said in its results announcement.

It added that it will keep making announcements on the use of the net placement proceeds from a FY2015 share issuance to Lian Beng Group as and when the proceeds - which came in at S$7.2 million - are materially disbursed.

Next up for Datapulse is a shareholder dialogue on March 26 and an extraordinary general meeting on April 20. The family of company co-founder Ng Khim Guan has requisitioned the meeting in a bid to overthrow the board and halt the Wayco-related business diversification.

Meanwhile, law firm RHTLaw Taylor Wessing LLP has been appointed to carry out an independent review of the company's internal controls and corporate governance practices, after the Singapore Exchange slapped Datapulse with a notice of compliance. The review must tackle, among other things, the facts and circumstance surrounding the board's approval of the Wayco deal.

Separately, Datapulse has commissioned an unrelated review of the acquisition. Ernst & Young Solutions LLP was appointed to advise the company on strategic options for Wayco's business.

The company said in its results announcement that it "is engaged in ongoing review and investigations into the financial affairs and business and operations of Wayco . . . in order to enable the company to assess and determine whether the buyback undertaking needs to be exercised".

The buyback undertaking refers to an option to sell Wayco back to its vendor at the same price paid, if material adverse events or matters crop up.

Datapulse closed up by S$0.01, or 2.94 per cent, at S$0.35, before the results were announced.