Central Global Berhad (CGB) announced that its 70%-owned subsidiary, RYRT International, via its wholly-owned subsidiary CIC Constructionhad, posted a Profit After Tax (PAT) of RM12.55 million for the Financial Period Ending (FPE) 28 February 2022.
As part of the acquisition of RYRT in January 2022, the Group had entered into a profit guarantee agreement whereby RYRT guarantees that it shall achieve an aggregate audited PAT of RM43.0 million for a period of 2 years for the financial year ending (FYE) 31 August 2022 and FYE 31 August 2023.
The acquisition was for a total indicative purchase consideration of RM30.1 million to be satisfied wholly via issuance of shares in CGB at the price of RM1.04 to be allotted and issued on a deferred payment basis at every 6 months interval equivalent to 70% of the aggregate audited PAT for each of the aforementioned 6 months interval.
In accordance with the terms of the Sale and Purchase Agreement (SPA) and Profit Guarantee Agreement, 8,448,380 Balance Consideration Shares, representing 70% of the aggregate audited PAT for FPE 28 February 2022 of RM8,786,316, shall be allotted and issued by CGB.
“Earlier this year, CGB executed a necessary business strategy to acquire RYRT International to expand our construction segment offering into the infrastructure construction sub-sector to ultimately create long-term revenue growth and income sustainability. We are delighted to see that the synergy that was created has resulted in the significant growth recorded in the Company’s profit,” Group Managing Director Chew Hian Tat said.
“We believe that moving further into 2022, the Malaysian construction industry will continue to expand, supported by further improving economic conditions coupled with the government’s focus on completing large infrastructure projects, and increased investments on industrial and energy projects. Based on this, there will be plenty of opportunities for RYRT International to explore and capture to enhance its long-term profitability as well as that of the Group’s,” added Chew.
Currently, RYRT International’s order book is valued at approximately RM262 million and is expected to improve barring any unforeseen circumstances.
