KUALA LUMPUR: Southern Score Builders Bhd (SSB) is poised for robust opportunities based on the domestic construction sector’s robust outlook and vast potential within the data centre and healthcare space.
Executive director and CEO Gan Yee Hin said the construction sector recorded a strong 17.2% GDP growth in the second quarter of 2024, driven by infrastructure development spending and pickup in private sector projects, underscoring the strong demand for construction services nationwide.
“At SSB, we have thus far secured RM933.2 million in new contracts this year, bringing our total outstanding order book to a healthy RM1.4 billion.
“Moving forward, we continue to tender for more projects in the high-rise building and infrastructure sectors,“ he said.
On the corporate front, SSB’s shareholders approved the acquisition of a 51.0% stake in mechanical and electrical (M&E) specialist SJEE Engineering Sdn Bhd (SESB) for RM23.0 million at the extraordinary general meeting (EGM) held last week.
This strategic move enables the group to gain a foothold in the growing data centre and healthcare building construction segments, widening its services and target market.
In return, with SSB’s support and resources, SESB can undertake larger-scale M&E projects, given the significant investments by global technology companies in setting up data centres in Malaysia.
A study by Research and Markets in April 2024 forecasts the Malaysian data centre market to more than double in size, expanding at a compound annual growth rate of 13.9% from US$1.8 billion in 2023 to an estimated US$4.0 billion by 2029.
“With SESB coming on board and our existing business going strong, we are confident we can ride on the twin engines of growth.
“All in all, the outlook for the group remains positive, underpinned by the factors above,“ Gan said.
To recap, the acquisition announced in May 2024 guarantees that SESB will make at least RM15.0 million in net profit over the next 3 years.
The acquisition exercise is expected to be completed by the third quarter of 2024.
On the fiscal side, SSB had, on August 30, reported a revenue of RM63.6 million for the fourth quarter (Q4) ended June 30, 2024 (FY24), marking a 107.5% increase from the RM30.6 million recorded in the same quarter last year.
This growth was primarily driven by the commencement of main building works for the new PV 22 Residences project and the completion of additional construction works across the group’s ongoing projects.
Net profit was RM12.9 million, representing a year-over-year increase of 3.1%.
For FY24, SSB’s revenue was RM170.7 million, compared to RM97.9 million in FY23, which consisted of only six months of performance due to a change in the financial year-end.
Net profit for FY24 came in at RM31.5 million, translating to a net profit margin of 18.4%.
On dividend distribution, SSB had, on April 30, paid out an interim dividend of 1.0 sen per share for FY24.
This amounted to RM22.7 million, representing a dividend payout of 72.3% based on its FY24 net profit of RM31.5 million.
