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June 2004SPK-Sentosa set to make a comeback with new investor

7th June, 2004, The STAR : Biz
By HASNI MOHD NASIR

SPK-SENTOSA Bhd is banking on the progressive strides made by holding company Sharikat Permodalan Kebangsaan Bhd (SPKB) to put it back into mainstream business.

The main board listed company, classified as PN10 - a company without core business - following the disposal of Capital Insurance Bhd in March 2001, is now remaking itself as the construction arm of SPKB.

Managing director Saiful Aznir Shahabudin said SPK-Sentosa currently had RM1.2bil worth of contracts in hand, mostly Government construction projects awarded to SPKB.

On top of that, SPKB has already submitted proposals - and is in active discussions - for local projects worth RM4bil. It is also formulating proposals on another RM4bil worth of projects locally and overseas.

"We are grooming SPK-Sentosa to be a leading construction company and we have put in all the strategies to make that happen," Saiful told StarBiz in an interview in Kuala Lumpur .

SPK-Sentosa has made good progress in all its projects, ending the financial year Dec 31, 2003 with all projects either on, or ahead of, schedule.

Phase 1 of the Jalan Duta Government quarters project was handed over five months ahead of schedule while the Hospital Temerloh project is already 65% to completion, despite working on a 30-month accelerated, versus the normal 40-month, schedule.

Two other projects on scheduled for completion in May and next year are the RM55mil Jalan Duta Access Road and the RM400mil Sabah East-West Grid Interconnection, respectively.

Saiful assumed the managing director's post two years ago, after his company Gerak Jaguh Sdn Bhd became a substantial shareholder of SPKB with a 20% stake.

SPKB is a wholly-owned Bumiputra company with paid-up capital of RM83mil. It has 5,500 shareholders but is not listed on any stock exchange.

SPKB owns 62.15% of SPK-Sentosa.

The first thing Saiful did when he came on board was to realign the business direction of SPKB, which led to the formation of three core businesses - construction, technology and property development.

The construction division is held under SPK-Sentosa, technology under SPK Technology, and property development under SPK Homes.

The construction assets of SPKB, including Menara SPK in Jalan Sultan Ismail, were transferred to SPK-Sentosa in a RM175mil deal involving shares and cash, and finalized in the middle of last year.

Saiful said that in realizing its target to be a world class player, SPK Sentosa focused on the human capital aspect by putting in place a strong management team.

"We hired top people with proven records to take up key positions, and this has been the driving factor for the company," he said.

He said SPK-Sentosa was in for more exciting times going by the property and construction projects planned by SPKB.

Among the RM4bil proposals submitted, two involved hospital projects worth RM500mil, and others road works and semi-private buildings.

Overseas, SPKB is eyeing projects in the Middle-East and Africa .

Through SPK Homes, SPKB is looking at further developing its landbank in Bandar Amanjaya, Sungai Petani; and in Bandar Menjalara, near Kepong. Both townships sprawl over more than 600 acres each.

"We also want landbanks in other locations, either through joint ventures or outright purchase," he said.

SPKB is looking at acquiring land in Johor Baru, Penang and Shah Alam for property development projects.

As for SPK Technology, the company is active in three areas - healthcare informatics, mobile computing and remote meter reading solutions.

Its subsidiary Solutions Protocol Sdn Bhd has been awarded a Letter of Intent to implement an integrated Total Hospital Information System for 14 Government hospitals as part of the Government's plan to fully computerize all public hospitals and healthcare facilities.

Both SPK-Sentosa and SPKB have seen marked turnaround in their financials since the completion of the restructuring exercise.

For the year ended Dec 31, 2003 , SPK-Sentosa reported a pre-tax profit of RM15.41mil against a loss of RM1.5mil previously. Revenue had ballooned to RM122.78mil from RM2.9mil before.

SPKB recorded a pre-tax profit of RM64.15mil, up from RM40.29mil, while revenue increased to RM368.8mil from RM290.71mil.

A shareholder of SPK-Sentosa contacted by StarBiz said the company held a lot of potential and was turning around nicely, as evidenced by the numbers.

"They have good projects and the current management is proving just that," he said.

A shareholder of SPKB said the company should move ahead strongly judging by the number of projects it had secured so far.

hareholders of SPKB are mainly top bumiputra corporate, most of them second generation holders.

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