DeClout doubles Q4 net profit on divestment gain

CATALIST-LISTED DeClout more than doubled its fourth-quarter net profit to S$10.9 million in FY16, mainly due to the S$21.8 million gain arising from the divestment of its subsidiary ATS and the gain on bargain purchase from acquisition of a new subsidiary.

The group also managed to spin off its subsidiary, Procurri Corporation Limited via an initial public offering (IPO) in July 2016 with a market capitalisation of more than S$100 million, representing a return on investment of approximately 233 per cent. The group's shareholding in Procurri was diluted from about 69 per cent to roughly 47.3 per cent after the listing.

Revenue for the three months as at end December was flat at S$91.2 million.

Cost of sales edged up slight by 1.9 per cent year on year to S$68.6 million.

Earnings per share rose to 1.73 cent in Q4 2016, up from 1.13 a year ago.

With the divestment and IPO, the group said that it has strengthened its liquidity significantly, turning from a net debt to net cash position.

"With the anticipated improved financial strength, the group embarked on an aggressive growth plan on its vertical domain clouds (VDC) segment in the second half of the year, pumping in more resources in expanding its e-commerce platform business and accelerating the development and growth of its newly acquired subsidiary in e-freight and e-logistic business," it said.

In its outlook, the group said: "Through our strengthened liquidity and balance sheet, we are preparing for the next phase of growth and the harvest of Beaqon Group. We will focus on the integration of newly acquired business to achieve synergy and operational efficiencies, further expanding its existing businesses organically and inorganically to fill up the revenue and profit gap left by the divested sub-group."