KUALA LUMPUR (Nov 3): Furniture maker Jaycorp Bhd has proposed to expand its principal businesses to include construction and property development.

The group said the move could open up new opportunities and fetch additional streams of income, thereby reducing its reliance on its current core businesses, which also include packaging, processing of wood and renewable energy.

“The proposed diversification is expected to contribute positively to Jaycorp group’s financial performance and in turn, improve shareholders’ value,” the group said in a stock exchange filing.

Jaycorp said it anticipates its new business segments to contribute at least 25% to its bottom line in the future, and result in a diversion of more than 25% of the group’s net assets.

The group’s ongoing construction contracts include the Likas Project and the UMS Project in Sabah, with a contract sum of RM16.8 million and RM12.6 million respectively.

The construction projects are being undertaken by its joint venture company formed in January 2016, Jaycorp Engineering and Construction Sdn Bhd (JECSB).

“JECSB intends to actively bid for more construction contracts in the future,” said Jaycorp.

The group also intends to venture into property development through the potential development of a piece of agriculture land located in Papar, Sabah.

The land measuring 396 acres, currently owned by Jaycorp’s indirect subsidiary Bongawan Solo Sdn Bhd, is designated for integrated tourism development by the Town and Regional Planning Department of Sabah.

“The company believes that the Bongawan land has potential for the construction and development of resorts, residential development and other tourism-related infrastructure which the company intends to pursue.

"Notwithstanding the proposed diversification, the group intends to continue operating its existing businesses and is continuously evaluating ways to improve its performance," it added.

The proposed diversification is subject to approval of Jaycorp's shareholders at an extraordinary general meeting to be convened.

Shares in Jaycorp settled unchanged at RM1.50 today after 154,000 shares were exchanged. This gives the company a market capitalisation of RM205.88 million.