KUALA LUMPUR (May 27): Prestariang Bhd’s net profit for 1Q15 fell 37% to RM4.01 million from RM6.4 million in its previous corresponding quarter, despite a revenue growth of 94% to RM40.03 million from RM20.59 million a year earlier. The group blamed the substantial fall on net profit to a lower margin generating segment.

“Due to its major contribution from a lower margin generating segment, the group recorded a decrease of 38% in profit after tax ('PAT') to RM4 million for the reporting quarter. Prestariang’s quarterly earnings per share (EPS) dropped to 0.83 sen from 1.46 sen announced for the same period last year,” it said in a statement today.

However, the group highlighted its healthy growth in revenue, to which it attributed to higher contribution from software licenses particularly from the newly awarded contracts by Microsoft Education Alliance Agreement contract from the Ministry of Education, and Microsoft Master Licensing Agreement 2.0 from the Ministry of Finance.

These software are to be distributed to schools and government departments and agencies respectively.

Moving forward, the group expects to remain profitable heading further into 2015. “2014 was an investment year where the company invested RM4.5 million on strategic development of new projects,” it said in its filing to Bursa today.

“Prestariang remains positive on its future business contributions and continues to gear itself towards growing a sustainable business with recurring income stream throughout 2015,” it said.

The board of directors has declared a dividend of 0.75 sen per share, totalling to RM3.6 million for the reporting quarter.

Prestariang share price (fundamental: 1.95; valuation: 0.5) closed with a 1.6% or four sen drop to RM2.50 for a market capitalisation of RM1.21 billion. Some 1.09 million shares exchanging hands today.

(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.)