• Annual General Meeting Approves Final Dividend Proposal for Financial Year Ended 31 December 2020
• Extraordinary General Meeting Greenlights Resolution Leading to the Deferment of the Second Year Profit Guarantee by Toyoplas

Shah Alam, Malaysia, 25 May 2021 – Kumpulan Perangsang Selangor Berhad’s (“KPS” or “the Company” or “the Group”) (KPS, Bursa: 5843; Bloomberg: KUPS:MK; Reuters: KPSB.KL) shareholders approved all resolutions on the agenda at the 44th Annual General Meeting (“AGM”). Subsequently, at the Extraordinary General Meeting (“EGM”), the shareholders also approved the proposed deferment of the second-year profit guarantee by Toyoplas Manufacturing (Malaysia) Sdn Bhd (“Toyoplas”).

As part of safety measures given COVID-19 pandemic, and in line with the Guidance Note on the conduct of general meeting issued by the Securities Commission Malaysia on 5 March 2021, the AGM and EGM were conducted entirely through live streaming, broadcast from KPS’ Corporate Office. KPS had prior planned to allow shareholders to vote electronically and transmit questions or remarks to the Board of Directors on the Remote Participation and Voting (RPV) platform.

At the AGM, KPS shareholders approved a final single-tier dividend of RM13.4 million or 2.5 sen per share for the financial year ended (“FYE”) 2020. The dividend payout represents 39.3% of the Group’s corresponding normalised PATAMI of RM34.1 million, well above what is guided by its recently adopted dividend policy, which is at least 30% of the normalised PATAMI. The final annual dividend will be payable on 24 June 2021, entitled to shareholders of record at the close of business on 31 May 2021.

In his presentation on the business review, Ahmad Fariz Hassan, the Managing Director/Group Chief Executive Officer, said that 2020 was shaped by the ongoing challenges in navigating and rising above business challenges arising from the pandemic. Despite the unprecedented challenges, KPS once again demonstrated its capacity for strategic agility, value creation and operational efficiency, having delivered better-than-expected results that confirmed the effectiveness of the Group’s strategy

The Group surpassed its RM1 billion revenue mark for fiscal 2020, growing commendably by 24.2% to RM1.1 billion, compared with RM866.8 million recorded in the corresponding period in 2019. Manufacturing contributed 83.1%, growing by 37.4% to RM894.6 million. The revenue contribution was followed by trading and licensing, each contributed 11.5% and 3.6%, growing by 5.7% to RM124.1 million and 8.0% to RM39.2 million, respectively. Infrastructure slagged, contributed 0.9% or RM9.1 million. Property investment contributed lower this period, contributing to the remaining RM9.5 million or 0.9% to the Group’s revenue.

Higher input costs at the manufacturing subsidiary level, lower interest income, and higher forex loss and impairment on an asset held for disposal resulted in lower operating profits by 33.1% to RM51.0 million.

The impact of operating profit to the bottom line was buffered by lower finance costs of RM30.4 million and higher share of profits from associates of RM36.6 million. As a result, PBTZ increased moderately by 4.1% to RM57.3 million. The Group posted RM34.1 million Profit Attributable to the Owners of the Parent, 26.9% higher than RM26.9 million registered in the corresponding period last year.

At the EGM, shareholders approved the only resolution on the agenda proposing the variation to the share sale agreement (“SSA”) of Toyoplas Manufacturing (Malaysia) Sdn Bhd (“Toyoplas”) dated 17 May 2019 between its Vendors and Guarantors, and KPS’ wholly-owned subsidiary Perangsang Dinamik Sdn Bhd (“PDSB”). The variations of the relevant provisions in the SSA include, among others, the deferment of the second-year profit guarantee of not less than RM42.3 million from FYE 2020 to FYE 2021. Other variations are subject to the conditions of the Variation Agreement entered into on 25 February 2021 between PDSB, the Vendor and the Guarantors.

The Vendor and the Guarantors had on 14 January 2021 requested for a deferral of the Second Year Profit Guarantee from FYE 2020 to FYE 2021 due to unprecedented challenges caused by the COVID-19 pandemic in the year 2020 that affected the business operations and financial performance of Toyoplas. The impact of the pandemic on Toyoplas’ financial performance had resulted in an aggregate shortfall to the Second Year Profit Guarantee of RM31.3 million.

KPS’ Managing Director/Group Chief Executive Officer, Ahmad Fariz Hassan, said:

“The steady revenue growth we registered in fiscal 2020 was the result of our agility in navigating the operational challenges such as disruption in supply chains and customer demand. Notwithstanding these challenges, our continuous efforts in ensuring the continuity of our operations strengthened our resilience. We assessed and responded quickly to these disruptions, ensuring the adaptability of our production. I am pleased to note that our manufacturing subsidiaries remained the main and steady contributor to the Group’s revenue even in a volatile operating environment.

Returning capital to shareholders in the form of 2.5 sen final dividend per ordinary share for FYE 2020 despite the current challenging economic landscape shows our financial commitment to the shareholders for their continued confidence and support. This is also a reflection of the Group’s healthy financial position and our confidence in creating value for our shareholders and the Company’s financial future. With the dividend payment, our excess capital remains at a level that will afford us the financial flexibility to grow our business and ensure a healthy balance sheet.

Concerning the deferment of the second-year profit guarantee by Toyoplas, the profit guarantee was determined based on business-as-usual assumptions at the point of the acquisition in 2019. Like many companies globally, in 2020, Toyoplas faced unforeseeable and unprecedented challenges at the onslaught of the COVID-19 pandemic, disrupting its business operations, market demand and supply chain, stifling its financial performance as a result. We believe that the variation provides a fair opportunity for Toyoplas to achieve the second-year profit guarantee in FYE 2021 with the expected alleviated business conditions in 2021 resulting from the anticipated revival of the global economy.”

GROUP PROSPECT

The staggered availability of the COVID-19 vaccine is expected to support the progress of the global economic revival, with many industries already adjusting to the new normal and planning for business recovery.

Having managed its business continuity and business resilience in 2020, KPS is expected in 2021 to focus on recovery, strategising on how it can grow on new possibilities to ensure that the Group continues to strengthen its prospect and, as a result, its earnings visibility. To drive this, its long-term strategic goals and value creation plans aim at further improvement in operational efficiency, penetration into new market segments and expansion of product mix and services across the subsidiaries.

“The lingering impact of the pandemic in the medium-term warrants prudence in manoeuvring our business as we advance, our resilience in critical areas such as demand and supply chain, the safety of the workforce and digital enablement has enabled us to navigate the arising complexity with more agility. Notwithstanding the above, we have persisted in consolidating our business strategy for our core business and look to the future with a relentless commitment to securing sustainable growth. Going forward, we are prepared to take advantage of the Group’s underlying fundamentals for potential success as we head into the new business reality”, Ahmad Fariz commented on the Group’s prospect for 2021 at the conclusion of the 44th AGM.

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About Kumpulan Perangsang Selangor Berhad (www.kps.com.my)

Incorporated on 11 August 1975, Kumpulan Perangsang Selangor Berhad (“KPS” or “the Company” or “the Group”) is a public limited liability company listed on the Main Market of Bursa Malaysia Securities Berhad under the Industrial Products & Services Sector. KPS has core investments in the Manufacturing sector, as well as businesses in the Trading, Licensing, and Infrastructure sectors. While strengthening our business to optimise returns, KPS is committed to providing significant contributions towards sustainable development in the areas of economic, environmental, and social for the benefits of all stakeholders. 

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