Libra Group eyes a piece of Malaysia's land and sky

Singapore

LIBRA Group may be only designing and building electrical and air-conditioning systems now, but if its executive chairman-cum-chief executive officer Chu Sau Ben has his way, it will be constructing property and flying airplanes in a year's time.

The Singapore-based, Catalist-listed integrated building solutions company is now eyeing a piece of Malaysia's land and sky by establishing itself in the property, tourism and aviation sectors up north.

"With the Singapore brand name that we carry, we hope to establish ourselves in these new markets and strengthen our revenue base," said Mr Chu in an interview with The Business Times on Tuesday.

Started in 1997, Libra is a mechanical and engineering (M&E) solutions, and building solutions provider, wiring up electrical systems for buildings such as Altez condominium in Tanjong Pagar.

It is also one of the largest manufacturers of air-conditioning and mechanical ventilation ducts in Singapore, counting Nanyang Technological University, Temasek Polytechnic and The Santorini condominium in Tampines as its clients. The company saw an increase of 42.3 per cent in revenue for the financial year ended Dec 31, 2015, to reach S$90.6 million, it said in its financial report issued in late February. Net profit rose 18.1 per cent to hit S$6.3 million.

Its core business of M&E has served it well, registering a 31.3 per cent rise to S$60.4 million on increased orders, while its manufacturing segment registered a 2.3 per cent growth to S$16.6 million.

Revenue for its building and construction segment, which was added in FY2014, surged to to hit S$13.6 million from S$1.5 million. This was due to contribution from its recently acquired subsidy, Cyber Builders.

It was acquired for S$999,900 last April, which was funded by the issuance of 4,545,000 new ordinary shares at S$0.22 apiece to Kong Ong Sing. Mr Kong was later appointed key executive of Cyber Builders and Libra Building Construction.

But already Libra is seeing thinning margins in its core businesses in Singapore.

Gross profit margin for its M&E business fell by 2.7 percentage points to 19.6 per cent "due to more competitive pricing submitted for projects secured," it noted in its financial report.

Libra also foresees increasing competition and rising labour costs in the construction industry in the near term.

Thus, it is with Cyber Builders that Mr Chu is gradually seeing his vision for Libra take shape.

"While Libra's core competencies is in M&E engineering, acquiring Cyber Builders has enabled us to develop the full spectrum of competencies and solutions for the building and construction industry and open up new revenue streams," said Mr Chu.

Now, Libra is taking it one step further by going abroad. Firstly, it is looking to establish itself in Kuala Lumpur's property sector.

Then it has its eyes set on Malaysia's tourism sector. The company is now looking at venturing into the tourism and leisure industry in Malaysia.

Additionally, Libra is looking to take Labuan-registered Neptune Aviation under its wing. When this is complete, Libra will be looking at owning four second-hand Boeing 737s within this year. It plans on leasing to potential clients.

Entering several new industries at once in a short period of time might entail some risk for Libra, which has a market capitalisation of about S$15.6 million, according to Bloomberg data.

But Mr Chu allayed those fears, saying that he has had amassed experience in these industries and consulted relevant experts over the past three years. "We will take things one step at a time. But if we want our profits to grow even more in the years ahead, we have to step out of Singapore and tap larger regional markets," he said.