September 19, 2011
eBworx Bhd, a company that specialises in technology solutions for the financial services industry, is looking into rewarding shareholders with its maiden dividend later this year.
Kuala Lumpur, 19 September 2011 - eBworx Bhd, a company that specialises in technology solutions for the financial services industry, is looking into rewarding shareholders with its maiden dividend later this year.
CEO Tan Suan Fong said with its top three shareholders collectively holding more than 70% equity interest in the company, eBworx is running out of shares to buy back, so a logical option is a dividend payout.
"There are limited options for us to explore on how to utilise the excess cash, so we are looking into rewarding shareholders who have been patiently waiting for their return on investment," he told The Edge Financial Daily recently.
As at June 30, 2011, the company had cash and cash equivalents of RM27.23 million. The company has a share base of 204.66 million shares, which means the company has cash per share of 13.3 sen.
The top three shareholders are CSE-Infotech Ltd with a 29.21% stake, OSK Capital Partners Sdn Bhd with 25.36% equity interest and Tan with 16.12%.
Tan said the company had been actively buying back its own shares, as well as cancelling shares to enhance value for shareholders. For FY10 ended Dec 31, he said, eBworx bought back 23.51 million shares from the market at an average price of 33 sen per share or RM7.7 million. The company cancelled 20.53 million Treasury shares valued at RM5.45 million or an average price of 27 sen per share, during the year.
According to announcements to Bursa Malaysia, as at mid-September, the company had 9.56 million Treasury shares which works out to almost 4.7% of its share base.
As at end-June this year the company's net assets per share stood at 33.37 sen, while the stock closed at 57.5 sen unchanged last Thursday.
On its business operations, Tan said eBworx had total new sales in excess of RM80 million year-to-date, a threefold increase year-on-year.
He said the company expects its order book to grow further as it is bidding for several banking projects centring on loans origination, transaction banking and mobile banking solutions across the region, adding that almost 65% of its revenue now comes from foreign markets.
Tan said eBworx's main revenue stream comes from systems maintenance and enhancement services, adding that without any new projects the recurring revenue from these existing projects could be in region of 65% of the total revenue for the current financial year.
"With most banks going regional, there is a need for larger operating systems and that augurs well for us," he added.
He said eBworx expects higher revenue in 2HFY11 from its operations in Thailand, Indonesia and Singapore, adding that China and Singapore contributed an estimated 50% to its revenue.
Tan said the company is very much human-driven and does not have to spend too much on capital expenditure.
"For 2011, we have allocated RM4.5 million for research and development, while about 80% of company expenditure is monthly recurring cost, that is salaries," he said.
Tan reiterated that eBworx aims to qualify for Main Market listing in 2012, and that it is a very successful example of a 100% local software house (developing banking systems for Tier-1 banks across the region).
For 2QFY11 ended June 30, eBworx's net profit tripled to RM2.98 million from RM973,000 a year earlier, due mainly to higher revenue from ongoing projects and new projects secured during the period.
Revenue rose to RM12.92 million from RM8.53 million in 2010. Earnings per share was 1.44 sen while net assets per share was 33.37 sen.
For the six months ended June 30, eBworx's net profit rose to RM5.56 million from RM2.72 million in 2010, on the back of revenue of RM23.94 million.
Tan said with the RM5.6 million net profit in 2Q, the company is on track to achieve an internal net profit target to exceed RM10 million for 2011, and is on course to be a RM20 million-net profit company by 2014.
Based on the Sept 15 closing price of 57.5 sen, eBworx now has a market capitalisation of RM117.68 million.
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