KUALA LUMPUR (May 28): It is twin-bonus for shareholders of Dominant Enterprise Bhd (DEB).

The company proposes a bonus issue of some 27.5 million new shares, on the basis of one bonus share for every five shares held by its shareholders. On top of that, it also proposes the issuance of 45.8 million free warrants to accompany the bonus issue, on the basis of one warrant for every three existing shares held.

DEB (fundamental: 1.1; valuation: 3.0) said the entitlement date for the issuances will be determined at a later date.

Meanwhile, DEB also announced that its net profit saw a 24% decline in its net profit to RM9.57 million or 6.96 sen per share for its fourth quarter ended March 31 (FY2015), from RM12.52 million or 8.99 sen per share a year earlier.

The lower net profit was despite a 16% increase in revenue to RM143.63 million, from RM123.74 million in the previous year.

The group proposed a single-tier final dividend payment of one sen per share for FY2015, bringing its total dividend payment per share to five sen for the year.

In its filing with Bursa Malaysia, DEB said its manufacturing division had posted lower operating profit of RM1.86 million for the quarter, despite an increase in revenue.

“The increase in revenue was mainly attributed to market share expansion and newly developed products, which enables the group to grow continuously,” it said.

The dampened performance of the manufacturing division was partly offset by higher operating profit from its distribution, as the segment recorded a gain on disposal of its warehouse in Puchong and better topline performance for the quarter.

For the full financial year ended March 31, the company’s net profit fell 3% year-on-year to RM22.43 million, from RM23.13 million, while revenue rose 15% to RM547.61 million from RM477.73 million.

On the company’s bonus issue, to accommodate the issuances, the group will be increasing its authorised share capital to RM500 million comprising 1 billion shares, from RM100 million of 200 million shares.

While the proposed bonus issue of shares and warrants are not expected to have any material effect on its earnings, DEB said there will be a corresponding dilution in the earnings per share (EPS) of DEB, due to the larger share base.

“Barring any unforeseen circumstances, the proposals are expected to be completed by the third quarter of 2015,” it said.

DEB rose 3 sen or 1.96% to close at RM1.56, bringing its market capitalisation to RM210.43 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)