KUALA LUMPUR (Sept 7): Software developer The Media Shoppe Bhd’s (TMS) wholly-owned unit Exonion Sdn Bhd has been awarded a RM192 million project management job for the development of a 12.14ha tract in Kemaman, Terengganu, which marks its first foray into the property construction business.
In a filing with Bursa Malaysia this evening, TMS said Exonion entered into a managing contract agreement for the said job in relation to a mixed development project on the land with Total Merit Sdn Bhd today.
The development entails two-storey shoplots with a total of 43 units, five blocks of 12-storey apartments with a total of 660 units, one block of 11-storey affordable apartment with a total of 240 units as well as amenities which include a mosque, kindergarten and swimming pool.
Under the agreement, Exonion will be responsible for the administration, management, consultation, reporting, communication, and coordination of construction and sales of the development project throughout the management period.
“It is the managing contractor’s responsibility to assist and advise Total Merit the appointment of a team of external contractors, subcontractors, engineer, surveyors, and professional consultants required for the development project,” the filing stated.
Total Merit is expected to issue a letter of award within two weeks of the execution of the managing contractor agreement, the filing stated.
TMS said the development is expected to be completed within four years from the commencement of the project and Exonion’s management period will span just as long, apart from a one and a half year defect liability period.
“It [the contract] provides an opportunity for the group to mitigate the dependency on its existing business by diversifying its income stream,” the filing read.
“The board believes that this development project would contribute positively to the group’s future earnings and improve the financial position of the group,” it said, adding the contract would improve the earnings and net assets of the group for the financial year ending Dec 31, 2016 (FY16).
TMS shares closed one sen or 3.7% higher at 14 sen, with a market capitalisation of RM60.91 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.)