MULTI-Purpose Holdings Bhd (MPHB), to be renamed Magnum Bhd, is looking to operate and manage the lottery business in other Asian countries in order to diversify its income stream.
A company official told Business Times that MPHB plans to operate the lottery businesses for those governments and the private sector that have the licences and operating assets but need experts to run them.
“The company would like to go overseas but it is not easy obtaining licences for lottery operations.
It makes more business sense for MPHB to manage for others and focus on what it is good at,” said the official. MPHB is sitting on a huge cash pile of RM817.9 million as of March 31 2013, compared with RM631.5 million a year ago.
A company official told Business Times that MPHB plans to operate the lottery businesses for those governments and the private sector that have the licences and operating assets but need experts to run them.
“The company would like to go overseas but it is not easy obtaining licences for lottery operations.
It makes more business sense for MPHB to manage for others and focus on what it is good at,” said the official. MPHB is sitting on a huge cash pile of RM817.9 million as of March 31 2013, compared with RM631.5 million a year ago.
The cash pile means the company, which has low gearing of 0.5 times, has more than enough money to expand and increase its dividends.
MPHB plans to pay dividends quarterly and has declared a dividend policy that pays at least 80 per cent of its net profit from gaming.
“They are looking at minimum 80 per cent. The plan is to pay more than that. The company is bullish on the gaming sector and expects a major improvement in earnings,” the source added.
For fiscal year 2012, the gaming division, led by Magnum Corp Sdn Bhd, achieved a pre-tax profit of RM148.39 million, which was 49.78 per cent higher than the RM99.07 million recorded previously.
Magnum, with 485 outlets, is Malaysia’s leading lottery operator with a 40 per cent market share.
MPHB recorded a net profit of RM153.9 million for the first quarter ended March 31 2013, compared with RM85.3 million in the same period a year ago. Revenue for the period was RM920.2 million against RM905.8 million previously.
Magnum contributed more than 80 per cent to the group’s net profit and revenue.
The official said MPHB is expecting 95 per cent of its net profit and revenue to come from gaming this year, and the rest from quoted investments and its holding in U-Mobile Sdn Bhd, which has a 3G licence.
Meanwhile, MPHB received the Registrar of Companies’ nod last Friday to change its name to Magnum Bhd. The new name, which will take effect on Wednesday, reflects its core business of operating and managing number forecast betting in Malaysia.
MPHB, set up in 1975, announced last year it planned to demerge its gaming and non-gaming assets, which includes general insurance, hotel and property.
The gaming business, including quoted investments and its holding in U-Mobile, is parked under MPHB while the non-gaming business is placed under MPHB Capital Bhd, which was listed last Friday.
Read more: Multi-Purpose eyes Asia boost to income http://www.btimes.com.my/Current_News/BTIMES/articles/20130630232958/Article/index_html#ixzz2XkouJcpI
