(By Jared Heng)
A Singapore-based general contractor has launched its initial public offering (IPO) to raise an estimated S$3.7 million (about US$2.67 million) in net proceeds for several strategic initiatives. CCM Group Limited’s (the “Company”) IPO of 25 million shares at S$0.20 each was launched 10 am Monday in conjunction with the company’s listing on the SGX Catalist. The offer will close at 12 noon on 1 July 2010, while trading in the Company’s shares on SGX Catalist is expected to start at 9 am on Monday, 5 July 2010.
The Company, through its wholly-owned subsidiary, CCM Indus- trial Pte Ltd (CCM Industrial), is engaged in the provision of main building works, general building works such as additions and refurbishments, as well as leasing and installation of access equipment systems such as gondolas and mast climbing work platforms. These services cover residential and commercial buildings for the public and private sectors.
“We are one of the leading players in the leasing and installation of access equipment systems with a fleet of more than 200 units of access equipment systems,” said Mr Joseph Liew, Executive Chairman and Chief Executive Officer of CCM Group Limited. “Our main customers for the access equipment systems include construction companies, property developers, nominated exter- nal facade sub-contractors, and players in the marine and oil-rig industry.”
The Company intends to use the estimated S$3.7 million in net proceeds from the IPO in several areas. Of the amount, S$800,000 will be used to purchase new equipment and machin- ery, which would be supported by “strong backups from banks,” according to Liew.
Next, S$500,000 will go into exploring strategic alliances or joint ventures to manufacture access equipment for sale and distribution or internal use, while another S$500,000 will help the Company expand its business in Asia-Pacific. Liew said that the Com- pany plans to have joint ventures with leading regional manufacturers, and is exploring expansion opportunities in Hong Kong, mainland China, Vietnam, India and Mongolia.
In addition, S$800,000 from the net proceeds will be used to obtain higher financial grading for building development, and S$500,000 will enable the Company to explore opportunities in mergers and acquisitions, joint ventures and strategic alliances. The remaining S$600,000 will go into general working capital.
CCM Group Limited’s total revenue jumped 53.8 per cent from about S$18.2 million in FY2008 to about S$28.0 million in FY2009. The growth was mainly attributed to an increase in revenue recognised from main building and general building works. Overall gross profit registered about S$6.8 million in FY2009, up 88.9 per cent compared with S$3.6 million in FY2008. In FY2009, significant increases in gross profits from the Company’s main building and general building works (mainly due to a reduction in prices of construction materials) more than offset lower gross profit from its leasing and installation of access equipment system business.
The Company has taken a strict stand on the strategic use of proceeds from the IPO. “Net proceeds from our IPO launch will not be used to repay loans, but to purchase new equipment to increase productivity and achieve long-term cost savings” among other initiatives, Liew said.
