KUALA LUMPUR (Nov 9): RCE Capital Bhd's net profit for the second quarter ended Sept 30, 2021 (2QFY22) fell 10.9% to RM31.55 million from RM32.99 million a year earlier, due to lower refinancing activities by customers amid the implementation of the Full Movement Control Order that restricted business activities nationwide from June 1.

The group saw a similar rate of decline in revenue to RM69.82 million from RM75.92 million last year, its quarterly earnings report showed. Earnings per share (EPS) of the group in 2QFY22 fell to 8.67 sen from 9.27 sen last year.

Notwithstanding the weaker quarterly earnings, the consumer and SME financing group's cumulative net profit for the six months ended Sept 30, 2021 rose 19.9% to RM66.93 million from RM55.82 million a year ago, while revenue climbed 5.1% to RM147.86 million from RM140.64 million. EPS rose to 18.47 sen from 15.79 sen.

The group announced a first interim dividend of seven sen per share, totalling an estimated RM25.56 million, to be paid out to shareholders on Dec 6.

It also wants to further reward shareholders with the distribution of up to 18.78 million treasury shares as dividend shares, on the basis of one share for every existing 20 shares held on an entitlement date to be fixed, together with a bonus issue of up to 360.25 million shares on the basis of 19 shares for every 21 shares held.

These issuances, it said, will effectively result in its shareholders getting one new share for every existing share held. The ratio was chosen to double the number of shares held by shareholders and minimise incidences of odd lots.

The proposals will be implemented concurrently with a single entitlement date. "For avoidance of doubt, the treasury shares shall be distributed to entitled shareholders before the proposed bonus issue. Therefore, the entitlement to the proposed bonus issue will be based on the increased number of shares held by entitled shareholders after the proposed share dividend," said RCE Capital.

The cost of the treasury shares to be distributed is approximately RM20.9 million, based on an average acquisition price of RM1.111 per treasury share. As at the last practicable date (LPD) of Oct 25, RCE Capital has 387.71 million issued shares which include 22.61 million treasury shares and 10.46 million outstanding share options that have not been exercised.

Going forward, the group expects its current year prospects to improve as the movement restrictions gradually ease, with more sales campaigns to onboard customers, complemented by its ongoing digital transformation initiatives. It added that it will continue to remain prudent in its portfolio quality management and expects FY22 to remain profitable.

Shares of RCE Capital climbed five sen or 1.34% to close at RM3.79, giving the group a market capitalisation of RM1.47 billion.