KUALA LUMPUR (May 23): Fresh from proposing the acquisition of mould fabrication firm Toyoplas Manufacturing (M) Sdn Bhd for RM311.25 million, Kumpulan Perangsang Selangor Bhd’s (KPS) said today that it will continue to look into potential companies with value-accretion to increase its earnings base.

“Toyoplas is just one of them [our planned acquisitions],” KPS group chairman Raja Shahreen Raja Othman told reporters, after the group’s 42nd annual general meeting (AGM) here. 

“We are continuously looking into what can be value-accretive to the group. The review of our portfolio is [still] ongoing,” Raja Shahreen said. 

KPS’ expansion in the manufacturing sector comes after its divestment of 30% in Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash). 

The group had cash of RM166.33 million at end last year, with gearing of 0.39 times. KPS chief executive officer (CEO) Ahmad Fariz Hassan told an interview in December last year that the group was ‘comfortable’ at a gearing of around 0.5 times.

In April, KPS received RM570 million out of the RM765 million cash due to it from exiting Splash, with the rest due in nine annual instalments, according to previous reports.

It has earmarked RM175.19 million for special dividend at 32.6 sen per share, following the divestment. At the AGM today, shareholders also approved a final dividend of 4.25 sen per share or around RM22.8 million for the year ended Dec 31, 2018 (FY18). 

Meanwhile, KPS plans to use up to RM161.25 million of its cash to part-fund the Toyoplas acquisition, with the balance — a minimum of RM150 million — to be funded via a term loan. 

At the press conference, Raja Shahreen described Toyoplas’ acquistion as "bolt-on" to support the expansion of its existing high precision plastics injection molding company CPI (Penang) Sdn Bhd. 

Both Toyoplas and CPI are also involved in electronic manufacturing services (EMS).

With operations in China, Malaysia and Indonesia, Toyoplas will be KPS’ third major acquisition, after CPI and paper and plastic packaging group Century Bond Bhd, pending the shareholders’ approval at an extraordinary general meeting end-July. 

At 4.10pm, KPS shares were trading 5 sen or 4.63% lower at RM1.03, giving it a market capitalisation of RM564.26 million.