Fm presentation final
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Sycal Ventures Bhd is an investment holding company founded in 1980 that focuses on construction, property development, and manufacturing in Malaysia and Hong Kong. It has over 169 employees and generated RM181.67 million in revenue in 2015. While the construction industry in Malaysia is growing, Sycal saw a drop in net cash flow between 2014 and 2015 and produced a cash flow loss in 2015. The company needs to maintain strong cash flow and reduce the time taken to pay accounts payable in order to improve its financial performance.
Fm presentation final
- 1. KEVIN LEE GOH JENG JHIEH CHUA JIA CHENG HAZIQ ZARIFUL KEVIN HII SYAFIQ ZARIFUL 0315192 0315080 0315160 0314131 0319223 0314702 1 Sycal Ventures Bhd. Company Analysis
- 2. Background of the Company Sycal Ventures Bhd. Company Analysis 2
- 3. Sycal Ventures Bhd. Company Analysis 3 - founded in 1980 and it was formally known as Cygal Berhad. - An investment holding company which mainly focuses in building construction and civil engineering works in Malaysia and Hong Kong. - 2 segments as its subsidiaries: property development & (12 indirect subsidiaries) manufacturing and trading. - Chairman of the company: Dato’ Sri Haji Abd Rahim Bin Haji Abdul (66 years old)
- 4. Principal Activities Sycal Ventures Bhd. Company Analysis 4
- 5. Sycal Ventures Bhd. Company Analysis 5 Contractor for building & Civil engineering works Property Development Manufacturing:- • Building Materials • Aircraft parts & equipment
- 6. Analysis of Revenue Contribution Sycal Ventures Bhd. Company Analysis 6
- 7. 7 Sycal Ventures Bhd. Company Analysis
- 8. 8 Sycal Ventures Bhd. Company Analysis
- 9. 9 Sycal Ventures Bhd. Company Analysis
- 10. Evaluation of Current Industry Sycal Ventures Bhd. Company Analysis 10
- 11. Malaysia GDP (obtained from http://www.tradingeconomics.com/malaysia/gdp-from-construction ) • 12,558 MYR million GDP is the highest since 2010. • GDP averaging at 9,439 MYR million from 2010 to 2016. • Construction industry is on the rise. Sycal Ventures Bhd. Company Analysis 11
- 12. Sycal Ventures Bhd. Company Analysis 12 Future growth - Construction industry remain healthy. - New plan for KL in the next 5 years. - CAGR increase by 16% for the 11th Malaysia Plan. - Positive expectations about future job supply have been supporting current stock prices. Challenges - Increased in oil price. - Imposed of GST. - Depreciation of RM.
- 13. Strength & Weaknesses Sycal Ventures Bhd. Company Analysis 13
- 14. Strength - Operates through 3 sectors which is construction, property development and manufacturing and trading - RM181.67m revenue with 169 numbers of employees - Strong liquidity of the company Sycal Ventures Bhd. Company Analysis 14 2015 2014 2013 2012 2011 Average Current Ratio (times) 1.92 1.98 1.55 1.46 1.67 1.72 Quick Ratio (times) 1.8 1.84 1.51 1.37 1.57 1.62
- 15. Weaknesses - Drop in net cash flow by 5.66M between years 2014 and 2015 - Used more cash to support its operation - Producing a cash flow loss of RM426k - Inventory turnover could ascertain - Long time to pay accounts payable Sycal Ventures Bhd. Company Analysis 15 -5000 0 5000 10000 2011 2012 2013 2014 2015 Cash Flow (RM'000)
- 16. Strategic Plans Sycal Ventures Bhd. Company Analysis 16
- 17. Sycal Ventures Bhd. Company Analysis 17 Seizing Opportunities • Repayment of RM 69m from 2014 to 2016 • Cygal Development Sdn Bhd had a 12 year contract with Pullman Hotel until 2022 • Will look to see it’s property development activities to snap up profit in the next 5-10 years • Potential RM1.2 billion GDV in future township development with PKNP
- 18. Facing Challenges • Sycal had broken away from the down trend chart recently after a strong rebound on the floor price Sycal Ventures Bhd. Company Analysis 18 • The major challenge is that they should maintain flow of strong volume in trend chart
- 19. Facing Challenges • Going through the current local currency with the effect of GST and strict lending policies Sycal Ventures Bhd. Company Analysis 19
- 20. Sycal Ventures Bhd. Company Analysis 20
- 21. Sycal Ventures Bhd. Company Analysis 21 2015 RM ‘000 2014 RM ‘000 2013 RM ‘000 Property, Plant & equipment 16,882 15,371 7,245 Difference with base year (2013) 9,637 (+1,511) 8,126 0 2015 RM ‘000 2014 RM ‘000 2013 RM ‘000 Freehold office lots and buildings - - - Plant and machinery 582 7,784 1,900 Motor vehicles 3,895 1,923 1,547 Office equipment, furniture and fittings 173 222 52 Theme Park - - - TOTAL 4,650 9,929 3,499
- 22. Sycal Ventures Bhd. Company Analysis 22 2015 RM ‘000 2014 RM ‘000 2013 RM ‘000 - Hire purchase 3,517 3,081 3,092 - Term loan 86 5,447 - - Cash payments 1,047 1,401 407 TOTAL 4,650 9,929 3,499 Equal to Total Additions of the year
- 23. Evaluation of Cash Flows Sycal Ventures Bhd. Company Analysis 23
- 24. 24 Sycal Ventures Bhd. Company Analysis
- 25. SUMMARY OF MAJOR CASH FLOWS OF SYCAL BERHAD IN 2015 25 Sycal Ventures Bhd. Company Analysis
- 26. 26 Sycal Ventures Bhd. Company Analysis
- 27. Free Cash Flow Sycal Ventures Bhd. Company Analysis 27
- 28. Sycal Ventures Bhd. Company Analysis 28 2015 2014 2013 2012 2011 RM'000 RM'000 RM'000 RM'000 RM'000 Net cash from operating activities = (426) (41,770) (14,148) 21,420 1,436 Cash payments planned for investments in long- term assets = (1,407) (1,401) (407) (40) (908) Dividends = 0 0 0 0 0 Total free cash flow = (1,833) (43,171) (14,555) 21,380 528 Free Cash Flow from 2011 to 2015
- 29. Evaluation of Company’s Performance Sycal Ventures Bhd. Company Analysis 29
- 30. (i) Liquidity Sycal Ventures Bhd. Company Analysis 30 2015 2014 2013 2012 2011 Average Current Ratio (times) 1.92 1.98 1.55 1.46 1.67 1.72 Quick Ratio (times) 1.80 1.84 1.51 1.37 1.57 1.62 Average Collection Period (days) 360 291 340 298 503 358 Average Payment Period (days) 257 200 246 230 263 239 Liquidity ratios from 2011 - 2015
- 31. (ii) Activities Sycal Ventures Bhd. Company Analysis 31 Activities ratios from 2011 - 2015 2015 2014 2013 2012 2011 Average Inventory Turnover (times) 14.07 18.37 39.55 18.25 10.69 20.19 Total Asset Turnover (times) 0.61 0.80 0.72 0.54 0.34 0.60
- 32. (iii) Debt Sycal Ventures Bhd. Company Analysis 32 Debt ratios from 2011 - 2015 2015 2014 2013 2012 2011 Average Debt Ratio (%) 54.18 55.99 53.14 45.34 44.07 50.53 Times Interest Earned (times) 13.63 26.09 72.23 16.21 4.76 26.58 Fixed Payment Coverage Ratio (time) 2.22 5.94 3.43 1.68 2.91 3.24
- 33. (iv) Profitability Profitability Ratio from 2011 - 2015 Sycal Ventures Bhd. Company Analysis 33 2015 2014 2013 2012 2011 Average Inventory Turnover (times) 14.07 18.37 39.55 18.25 10.69 20.19 Average Payment Period (days) 257 200 246 230 263 239 Total Asset Turnover (times) 0.61 0.80 0.72 0.54 0.34 0.60 Times Interest Earned (times) 13.63 26.09 72.23 16.21 4.76 26.58 Gross Profit Margin (%) 12.80 10.67 10.86 12.10 19.34 13.15 Operating Profit Margin (%) 7.32 9.54 6.5 8.77 10.24 8.47 Net Profit Margin (%) 5.38 8.59 5.96 5.26 5.79 6.20 Return on Total Assets (%) 11.27 17.70 16.28 24.60 11.65 16.3
- 34. (v) Market performance Market Performance Ratio from 2011 - 2015 Sycal Ventures Bhd. Company Analysis 34 2015 2014 2013 2012 2011 Average Return on total assets (%) 3.49 6.99 4.44 2.84 1.78 3.91 Return on common equity (%) 7.75 16.11 9.58 5.24 3.22 8.38 Earning per share (RM) 0.05 0.11 0.05 0.03 0.02 0.05 Price/earnings (times) 7.59 2.93 5.14 6.45 9.97 6.41 Price/book ratio (times) 0.55 0.48 0.46 0.34 0.31 0.43
- 35. Forecast of Financial Year 2016 Sycal Ventures Bhd. Company Analysis 35
- 36. Sycal Ventures Bhd. Company Analysis 36
- 37. Sycal Ventures Bhd. Company Analysis 37 Required New Funds (RNF) = A (ΔS) − L (ΔS) − PS2 (1−D) S S A/S = Percentage of relationship of variable assets to sales ΔS = Change in sales L/S = Percentage of relationship of variable liabilities to sales P = Profit margin S2 = New sales level D = Dividend payout ratio Required New Funds for 2016
- 38. Sycal Ventures Bhd. Company Analysis 38 Required New Funds (RNF) = 135.13% (19,303) − 70.20% (19,303) − 5.38% (341,020) (1-0%) = 26,083.71 − 13,550.87 − 18,346.88 = RM (5,814.04) Required New Funds for 2016 Negative number indicates, with the forecasted 6% revenue growth, NO Additional external Funds are needed , to fund the growth
- 39. Conclusion Sycal Ventures Bhd. Company Analysis 39
- 40. Sycal Ventures Bhd. Company Analysis 40 • Have great competitive advantages over companies • Major drop in cash flow • Takes a long time to pay accounts payable • Maintain a strong positive cash flow • Be more consistent in selling off its inventories and maintain a positive cash flow.
- 41. THANK YOU Sycal Ventures Bhd. Company Analysis 41
Editor's Notes
- #23: May need to go back to previous slide to explain
- #37: Eg.: With a predicted 6% Revenue growth in 2016 by Sycal Berhad, the forecast of the income statement for the financial year of 2016 can forecasted by the percent-of-sales method. As seen in the slide:
- #38: Mention: Calculations can be seen in the hardcopy report