KUALA LUMPUR (June 29): ACE Market-bound Unique Fire Holdings Bhd targets to raise RM21.78 million from its initial public offering (IPO) to expand its manufacturing, operational capabilities, and geographical coverage.

The IPO entails a public issue of 83.75 million new shares as well as an offer for sale of 30 million existing shares at an issue and offer price of 26 sen apiece.

The group — which manufactures, assembles and distributes fire protection systems, equipment and accessories for the built environment — is slated to be listed on the ACE Market of Bursa Malaysia on Aug 5, 2022.

For the public issuance, 20 million shares will be made available to the Malaysian public, and eight million shares to the group’s eligible directors, employees and persons who have contributed to the success of Unique Fire.

Another 5.75 million shares will be made available by way of private placement to selected investors, and the remaining 50 million shares will be made available by way of private placement to bumiputera investors approved by the Ministry of International Trade and Industry.

At the issue price of 26 sen per share, the group expects to raise RM21.78 million from the listing exercise, of which it has earmarked RM6 million for the expansion of its geographical coverage — a new sales office with a warehouse in Penang and Johor respectively — and RM2.5 million for the expansion of its manufacturing facilities.

Meanwhile, another RM5.3 million will be set aside for the expansion of its operational capabilities, RM4.58 million for working capital, while remaining RM3.4 million will be used to fund the listing expenses.

Unique Fire’s enlarged share capital of 400 million shares coupled with the issue price of 26 sen per share translates to a market capitalisation of RM104 million upon its listing on the ACE Market.

In a statement on Wednesday (June 29), Unique Fire managing director Liew Sen Hoi said the listing exercise is to elevate the group’s profile, enhance its credibility and visibility among the public, as well as fund its aforementioned future plans.

“Our cylinder manufacturing line has been experiencing high utilisation rates and nonetheless we continue to strategise and strive to cater for the unrelenting demand for fire protection systems which are critical mandatory products that are required in built environments. Upon completion, this will boost our current production capacity of 210,000 units [per year] by over 220%.

“On top of that, we are also expanding our operational capabilities by increasing our storage capacity, implementing a warehouse management system, a digital fire extinguisher identification system, as well as [enhancing] our IT system to increase the overall efficiency of our operations,” he explained, noting that these plans are set to be implemented within three years from its listing.

For the financial year ended March 31, 2021 (FY21), Unique Science posted a profit after tax (PAT) of RM5.32 million compared with RM7.48 million in FY20 and RM9.95 million in FY19.

Revenue stood at RM63.44 million in FY21 versus RM76.19 million in FY20 and RM79.7 million in FY19. Notably, the group’s PAT margin has been on the decline, as in FY21 it stood at 8.39%, down from 9.82% in FY20, which in turn was lower than the 12.48% in FY19.

As for the nine-month financial period ended Dec 31, 2021 (9MFY22), Unique Fire’s PAT stood at RM4.41 million with a revenue of RM53.87 million — a PAT margin of 8.19%.

In a press conference following its IPO prospectus launch, Unique Fire executive director Datuk Marcus Liew said the main reason for the consecutive year-on-year slips in the group’s PAT margin was the Covid-19 pandemic as well as the strategies it undertakes to maintain its market share in Malaysia.

“One of the main reasons behind this is the [Covid-19] pandemic. Besides the pandemic, in order for us to do more sales or gain more revenue, discounts were granted to certain key customers in order for us to maintain our market share in Malaysia,” he said.

Additionally, Marcus noted that the rising steel price has also hampered its profit margin due to the higher costs it induces the group to incur. However, he noted that the group is able to pass down some of the increased costs to its customers.

He noted that according to Vital Factor Consulting — in terms of revenue — Unique Fire holds the third largest market share in the Malaysian fire protection industry.

Unique Fire said that while it does not presently have a fixed dividend policy, the group added that it is its directors’ policy to allow its shareholders to participate in the profits of the group while also leaving adequate reserves for the future growth of the group.

Alliance Islamic Bank Bhd is the principal adviser, sponsor, sole underwriter and placement agent for the IPO exercise.