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Silverlake Axis Q4 profit bolstered by accounting gains

Software solutions provider Silverlake Axis, the latest Singapore stock to fall prey to short-sellers last week, reported a one per cent rise in net profit for the fourth quarter ended June 30 from a year ago to RM74.7 million as a surge in other income offset a decline in revenue and share of profit from associates and a joint venture.

Other income increased significantly from RM3.2 million in a year-ago period to RM24.3 million in the fourth quarter, which the group attributed to an accounting gain of RM19.2 million on dilution of interest in an associate in China, Global InfoTech Co Ltd, following its initial public offering in May.

The realised foreign currency exchange gains recorded during the quarter were also higher at RM3.3 million, up from RM296,500 due to the appreciation of Singapore dollar and US dollar bank balances and receivables against the Malaysian ringgit.

Revenue for the quarter slipped 8 per cent to RM126.4 million, with the drag mainly from software licensing, credit and cards processing, as well as an absence of sales clocked for software and hardware products.

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For the full year ended June 30, the group reported a 14 per cent rise in net profit to RM282.7 million, while group revenue grew 3 per cent to RM516.0 million.

The increase in the group's revenue was due to higher contribution from maintenance and enhancement services and insurance processing, partially offset by a decrease in revenue contribution from sale of software and hardware products, credit and cards processing, software project services and software licensing.

The Board has proposed a fourth and final dividend of 1.2 Singapore cents per share. The group issued one bonus share for every five existing ordinary shares on July 8 and these bonus shares are entitled to the proposed final dividend.

Together with the interim dividends, total dividends for the financial year amounted to 4.2 Singapore cents per share. Because of the bonus shares, existing shareholders would have received the equivalent of 4.44 Singapore cents per share in fiscal 2015 compared to 4.50 cents per share in fiscal 2014 (which included a special dividend of 0.6 Singapore cent per share).