26 June 2014

Grand-Flo expects RM5m profit from property business

  26 June 2014


PETALING JAYA: Tracking solutions provider Grand-Flo Bhd, which is diversifying into property development, expects the new segment to contribute more than a fifth to its profit.

The group had proposed in April to acquire a 50 per cent equity in property developer Innoceria Sdn Bhd (ISB) for RM15 million. ISB holds the rights to develop Vortex Business Park in Batu Kawan, Penang.

Grand-Flo group president and managing director Derrick Tan said ISB will provide an after-tax profit guarantee of at least RM5 million in the financial year ending December 31 2014 and RM10 million in the following financial year.

“The contribution from property development will change the group’s profit mix to more than 20 per cent coming from the new business segment,” he said after the company’s annual general meeting, here, yesterday.

The Vortex Business Park is a mixed development with a gross development value of RM220 million. It comprises 60 units of four-storey semi-detached shop offices and 52 units of four-storey light industrial factories.

Construction is expected to start this year and complete in 2017.

Tan said the proposed acquisition of ISB and diversification is subject to approval from Grand-Flo shareholders at its forthcoming extraordinary general meeting.

“We believe that diversifying our business to include property development will aptly complement the group’s existing core business as well as boost value for our shareholders in the longer term,” he said.

The company has a presence in Malaysia, Thailand, Vietnam, Hong Kong and China, and has extended its distribution network to Indonesia and the Philippines.

~ By BUSINESS TIMES

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