By Xavier Kong
WIDAD Group Bhd has identified the integrated facilities management market as a “Blue Ocean” sector for the group, marking it as a space that can help the group grow at a higher rate, compared to focusing purely on the construction sector.
“The IFM (integrated facilities management) market is a very exciting space for us,” its executive chairman Datuk Feizal Mustapha told FocusM on Nov 29, stating that the group saw IFM and construction as complementary competencies that would spur growth for the group.
Widad has been “very active this quarter”, according to Feizal, having entered two Heads of Agreement (HoA) for IFM concessions for Universiti Teknologi Mara (UiTM).
The most recent was a HoA to acquire the concession for Campus 3 of the Negeri Sembilan branch of UiTM for RM122 mil. The concession actually belongs to Innovatif Mewah Sdn Bhd, an indirect subsidiary of Menang Corporation Bhd.
The primary shareholders of Innovatif Mewah are Menang Industries (M) Sdn Bhd and Menang Development (M) Sdn Bhd, both of which are wholly-owned subsidiaries of Menang Corporation Bhd. The third shareholder is Tentu Selesa Sdn Bhd.
This agreement, which was announced on Bursa Malaysia on Nov 27, comes on the back of a previous HoA where Widad is acquiring the concession for UiTM’s Jasin, Melaka campus for RM95.9 mil, which was announced on Oct 17. This particular concession belongs to YBK Usahasama Sdn Bhd, a wholly-owned subsidiary of Serendah Heights Sdn Bhd.
According to Feisal, the two combined will provide an addition of “about RM1.8 bil to our order book for the next 14 years, as both concessionaires are for a period of 14 years starting from Jan 1, 2020.” The value from the two acquisitions come to RM838 mil and RM861.6 mil respectively.
This rounds the group’s order book to RM3 bil moving forward, which include current construction and IFM contracts in place, which account for about RM900 mil up till 2023.
The group also posted its financial results for the third quarter of its 2019 financial year, reporting a quarterly revenue of RM40.3 mil, down 38.4% year on year (yoy) from RM65.5 mil a year ago. Net profit, however, rose 1.5% yoy for the quarter to RM6.8 mil.
For the nine-month period, Widad saw a revenue of RM118.2 mil and a net profit of RM18.1 mil, compared with RM182.5 mil and RM14.6 mil a year ago, respectively.
“The reduction (in revenue) was mainly due to the completion of two construction works and an IFM contract in early financial year 2019, as well as slower construction works,” the group noted, professing confidence for the remainder of the financial year, which ends on Dec 31.
Widad is listed on the ACE Market of Bursa Malaysia. The counter closed at 52 sen, up one sen, with 16.76 million shares transacted on Nov 29.
