LKL International to buy dialysis player as quarterly profit jumps on higher sales
28 Sep 2020
LKL International Bhd’s net profit for the first quarter ended July 31, 2020 (1QFY21) rose to RM1.24 million, from RM124,000 a year earlier, on higher sales of medical and healthcare beds as well as peripheral medical accessories.
In a bourse filing, the hospital and medical furniture manufacturer said quarterly revenue more than doubled to RM19.28 million, from RM9.35 million in 1QFY20.
Local sales made up 90.7% of the revenue, compared with 76.2% in 1QFY20.
“The growth was due to a significant rise in top line contributions from the Malaysian market in the current financial quarter, with local sales leaping 145.2% or RM10.351 million to RM17.479 million from RM7.128 million in the preceding year’s corresponding quarter, as the group emphasised on fulfilling domestic requirements amidst the Covid-19 pandemic,” the group said.
LKL International said export sales moderated by 19.1% or RM425,000 to RM1.8 million, from RM2.22 a year earlier, due to lower sales to Africa and the Middle East.
In a separate filing, LKL International said it is acquiring a 60% stake in Tahmaz Meditech Sdn Bhd for RM12 million. It will pay for the stake via the issuance of 12 million new LKL International shares at RM1 apiece.
The transaction was inked between LKL International and Ahmad Izhan Abd Rashid, Andrew Suriady Sjoekoer, Chong Mei Ling and Goventamal Vadivelu.
Tahmaz Meditech is involved in the trading of dialysis machines, filters and other related peripherals.
As part of the agreement, Ahmad, Sjoekoer, Chong and Goventamal have to ensure that Tahmaz Meditech will achieve a minimum profit after tax of RM15 million for the financial years ending April 30, 2022 (FY22) to FY24.
“The proposed acquisition enables the company to increase its product range and provide an additional income stream for LKL International.
“Both LKL International and Tahmaz Meditech are involved in the healthcare service industry, and the proposed acquisition will strengthen the business of the group,” it added.
LKL International’s share price finished unchanged at RM1.06, valuing the group at RM454.53 million. The counter saw 12.04 million shares traded.
Source: The Edge Markets Posted on : 28 September 2020