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Thursday, October 16, 2014

Better returns for I-Bhd investors


PETALING JAYA: I-Bhd, which has completed its corporate exercise involving, among others, a share split, a rights issue with warrants and a bonus issue, expects further enhancement to returns to shareholders as the company continues with its double-digit growth in revenue in the coming few quarters.
Deputy chairman Datuk Eu Hong Chew said the growth would translate into better earnings and improve it earnings multiple.
“At the same time, as we build up our property investment portfolio, the contribution from the recurring income stream would increase, thereby providing more sustainable earnings. We would also expect this to improve the valuation multiple,” Eu said in a statement.
I-Bhd’s 103 million bonus shares and 11.4 million additional warrants were listed on the Main Market of Bursa Securities yesterday.
“On the funding side, the rights and offer for sale of ICULS (irredeemable convertible loan stock) have been well received, with the rights being oversubscribed by 8% and the ICULS being oversubscribed by 12.8%. The ICULS are currently in-the-money, and hence we expect some immediate conversion of the ICULS.
“We believe that this is sort of a precedent in the Malaysian corporate scene and along this line, we are confident that for the warrants, the shareholders would not have to wait too long before the share price goes above the ex-bonus warrants conversion price of RM 1.41.” he said.
Eu said the corporate exercise was undertaken to support the group’s business plan to establish itself as a strong recurring income property group by 2018.
By 2018, the group aims to achieve an annual turnover of RM500mil from its property development segment. At the same time, it would have build up its property investment portfolio to RM1bil while the leisure segment revenue is expected to be RM100mil per year.
Based on this target, the group envisages that half of it earnings would be from recurring income streams – investment property and leisure segments.

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