AHB Holdings in the red again

OFFICE furniture maker AHB Holdings Bhd plunged into a Practice Note 17 (PN17) status in early Nov 2014 due to the de-consolidation of its wholly-owned subsidiary that was wound up.

The company’s slip into the PN17 status came as a shock to investors who has subscribed to its rights issue, reported a FocusM article in its Jan 10 – 16, 2015 issue.

According to the article, AHB reported an improvement in earnings in its first quarter of FYE16/15 ended Sept 30, 2014.

It reported a net profit of RM440,000 against a net profit of RM230,000 in the same period a year ago, said the article.

In its 2014 annual report, AHB managing director Yong Yoke Keong blamed its PN17 status on a bank for having refused to negotiate with regard to an outstanding loan of approx. RM1.2 mil, instead of having opted to shut down the business by winding up a then-dormant subsidiary.

The action led to AHB being classified a PN17 company because its external auditors expressed a disclaimer due to uncertainties regarding the effects in the group’s financial statements.

However, in the following year of 2016, The Edge Markets reported that AHB’s shares jumped 12.20% on Apr 18, 2016 after the company escaped from its PN17 status by regularising its financial condition and level of operations.

While the company no longer triggers any of the criteria of the PN17 status, Bursa Securities continued to monitor the progress of the company in respect of its compliance with the listing requirements.

In another The Edge Markets article on May 16, 2016, Keong told The Edge that ‘he is apologetic about the stock’s performance’ and that the company will continue to aim to become the largest premium office furniture firm in the country by 2020.

“I’m sorry (for what happened) but that event was beyond my control. The show must go on and it went on. I did what I could to get back and I’m back. This time, I’m not going to make the same mistake,” he said in the article.

A little down the line, the company did see some improvements when The Edge Markets reported on Aug 9, 2017 that AHB’s share price rose to its highest level at the time since 2005 to 36.5 sen and a market capitalisation of RM58.4 mil.

This was despite the fact that AHB’s net profit declined 70% to RM548,000 in FY17 from RM1.8 mil a year earlier and its revenue fell 25% to RM12.5 mil compared to the previous RM16.7 mil.

However, Keong was optimistic enough to say that things were getting better for the company.

“Overall, corporations are spending money (on office furniture). One of our major customers have given us an order as large as RM30 mil over the next two to three years,” he told The Edge in the Aug 2017 report.

Unfortunately, that was not the case, as AHB’s share price fell 4.41% on Sept 21, 2017 to 32.5 sen after it announced its plans to raise between RM5.04 mil and RM7.28 mil via private placement for working capital and capital expenditure.

On July 26, 2019, the company announced that it was planning to raise another RM9.86 mil from two more private placements, where RM4.81 mil of the money will be used for working capital needs and another RM4.13 mil for capital expenditure purposes.

One of the private placements accounting for 10% of the group’s total share capital of 17.60 mil shares (expected to raise RM2.47 mil), while the second placement will be 30% of the total share capital of 52.81 mil shares, with expectations to raise RM7.39 mil (based on an indicative placement price of 14 sen apiece).

The company also noted that the proposed 10% private placement is expected too be completed by the fourth quarter of 2019 and the 30% in the first quarter of 2020.

An article by The Edge Markets on Apr 14, 2020 showed that AHB received a time extension to complete its private placement application by six months, with the new completion date falling on Nov 4, 2020.

This was actually the second extension given to AHB in relation to its private placement exercise, following the first one on Jan 15, 2020.

Finally, the latest news from the company was not a good one either, where AHB was given an unusual market activity (UMA) query by Bursa Malaysia on Aug 25, 2020 due to a sharp rise in its price and volume recently.

However, according to Bursa Malaysia, AHB’s revenue had a slight decline on its third quarter ended June 30, 2020 (3Q20) to RM 1.01 mil compared to last year’s RM3.31 mil and experienced a net loss of -RM2.4 mil versus 3Q19’s earnings of RM266 mil.

As of 5.26pm today, AHB’s share price dropped 8% to 23 sen with a market capitalisation of RM55.26 mil. – Sept 17, 2020

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