KUALA LUMPUR (March 25): Grand-Flo Bhd, which acquired a 50% stake in property development company Innoceria Sdn Bhd last year, said the period for the RM15 million net profit guarantee provided by the vendors will be three years instead of two as initially agreed.

The vendors had guaranteed a net profit of RM10 million in 2014 and RM5 million in 2015, but both parties have now agreed to an aggregate profit guarantee of RM15 million for a three-year period from 2014 to 2016.

"This agreement was reached after reasonable consideration of the unexpected longer gestation period in the development business which was not foreseen at the time of the acquisition," said Grand-Flo in a filing with Bursa Malaysia today.

Grand-Flo had acquired the stake from Chuah Chew Hai and Chong Poh Yoong for RM15 million, to be satisfied by an issuance of new shares and a cash payment of RM5 million.

Grand-Flo, which specialises in enterprise data collection and collation system solutions business, diversified into property development with a 52% stake acquisition in Penang-based property developer Jalur Bina Sdn Bhd for RM2.4 million in August 2013.

In subsequently proposed the acquisition of Innoceria, also a Penang-based property developer, which holds the rights and interest to develop the RM220 million Vortex Business Park commercial project in Batu Kawan, targeted for completion in 2017.

Shares in Grand-Flo closed up 0.5 sen or 2% today at 25.5 sen, with a market capitalisation of RM123.19 million.