Signature Alliance expects double-digit net profit growth in FY25
KUALA LUMPUR: Interior fitting-out specialist Signature Alliance Group Bhd expects double-digit net profit growth in financial year 2025 (FY25), driven by projects in the pipeline and market visibility following its debut on the ACE Market.
Executive director/group CEO Darren Chang said the company is confident of securing 15% to 20% of its RM1.1 billion tender book by the end of 2025, supported by an unbilled order book of RM388 million.
'Because with the book order that we already have and with the first Q1 (results), I can say that compared to last year, this year should be a double-digit growth,' he told the media after the company's listing today.
The tenders primarily comprise commercial and industrial property projects as at April 16.
Chang said Signature Alliance currently holds only about 8% market share in Malaysia's interior fit-out sector which means room for expansion. 'We are not only focused in one sector like corporate offices or hotels. We are in all sectors. All sectors have the opportunity for us to work.'
As at April 16, Signature Alliance had 69 ongoing projects with a total contract value of RM902.4 million, of which RM388.6 million unbilled.
For the first quarter ended March 31, 2025 (Q1'25), Signature Alliance reported a net profit of RM15.8 million on the back of revenue of RM147.2 million.
The performance was driven by interior fitting-out works for two major projects – a commercial office property in Bandar Baru Sri Petaling and a commercial hotel property in Tun Razak Exchange, accounting for 38.9% and 11.9% of the revenue respectively.
For FY24, Signature Alliance's net profit surged 290.4% to RM40.6 million, from RM10.4 million in FY23. This was attributed to higher gross profit and net gain on impairment of financial assets and contract assets. Revenue for FY24 rose 122.6% to RM386.0 million, from RM173.4 million in FY23.
Chang attributed the profit leap in recent years to support from parent company Signature International Bhd, which gave Signature Alliance better financial standing and bargaining power.
'Right after we joined Signature International Bhd, they gave us strong financial backing. With that support, we had better negotiating power with our vendors – allowing us to secure discounts by offering better payment terms, prompt payments, and so on.'
'Following this IPO, we'll continue applying the same strategy, and with our improved brand visibility, we expect more vendors to approach us. This gives us more options and more competitive pricing for our projects.'
Signature Alliance made a firm debut on the ACE Market of Bursa Malaysia, opening at 68 sen, 6 sen or 9.7% above its initial public offering (IPO) price of 62 sen. The stock closed at 70 sen, an 8 sen or 12.9% premium over the IPO price, with 90.9 million shares traded.
Signature Alliance's listing comes on the back of a fully subscribed IPO, with its public portion oversubscribed by 1.12 times.
The offering raised RM161.2 million through the issuance of 260 million new shares at 62 sen apiece, giving the company a market capitalisation of RM620 million at listing.
Of the proceeds, RM88 million (54.6%) will be used to establish a new corporate headquarters and centralised production facility in Selangor, RM30.1 million (18.7%) toward working capital, RM20 million (12.4%) to repay bank borrowings, RM12 million (7.4%) to set up branch offices in Penang and Johor, RM4 million (2.5%) for new machinery, and RM7.1 million (4.4%) to cover listing expenses.
M&A Securities Sdn Bhd is the adviser, sponsor, managing underwriter, joint underwriter and joint placement agent while Affin Hwang Investment Bank Bhd is the joint underwriter and joint placement agent for Signature Alliance's IPO.
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