Is Censof up for sale?

CENSOF Holdings Bhd is believed to be up for sale, drawing keen interest from several parties, according to sources.

A source, who is eyeing a controlling stake in Censof, is primarily interested in its strength in providing financial management software solutions to the government.

The source adds that it has put up a bid of over RM100mil for Censof.

Censof declined to comment when asked by StarBizWeek.

The company’s single-largest shareholder is Ameer Shaik Mydin, 61, with a 0.28% direct stake and an indirect 35.06% stake via SAAS Global Sdn Bhd. He is the group managing director of Censof.

Ameer, who has extensive experience in the IT and financial services sectors, was appointed executive director of Censof in 2008. In 2014, he was named group managing director of Censof, overseeing all subsidiaries.

Other major shareholders include Tan Chean Suan with a 14.26% interest and Tan Sri Mohd Ibrahim Mohd Zain, who owns a 6.76% stake.

In April 2020, Tan, who is a businessman, emerged as a substantial shareholder of Censof after acquiring a 5.35% stake in the tech company. He is the chief executive officer of TCSens Sdn Bhd, which provides radio frequency identification solutions.

The company hogged the limelight recently for its involvement in the e-invoicing market.

The implementation of mandatory e-invoicing by the Inland Revenue Board (IRB) has ignited interest in Censof, with its share price rising by over 39% year-to-date.

The counter touched a year high of 42 sen last month but succumbed to profit taking to close at 30 sen on Aug 15.

At the current share price, Censof has a market capitalisation of RM168.45mil with a price earnings ratio of 37.94 times.

On July 31, Censof announced that it had partnered with Netherlands-based Storecove, via its wholly owned unit Century Software (M) Sdn Bhd, to enhance its e-invoicing capabilities.

Censof says it selected Storecove for its e-invoice rollout due to Storecove’s adaptive solution, as well as its proven expertise and experience.

Censof, which specialises in financial management software solutions, says it had been seeking an e-invoice service provider to white-label and offer e-invoicing solutions (CSInvoicer) to its clients without investing in the development of new Peppol-ready middleware.

Storecove had also collaborated with another Censof subsidiary, CS-Cloud, a system integrator for Censof. CS-Cloud’s engagement with Storecove offered Peppol connectivity and reporting which is in compliance with IRB requirements.

The integration party supports customers using various enterprise resource planning systems in connecting to the e-invoicing Application Programming Interface, enabling businesses to send and receive e-invoices while ensuring compliance with IRB regulations through automated reporting.

The first phase of the government’s e-invoicing started on Aug 1 for companies with annual revenues exceeding RM100mil.

Apart from e-invoicing, Censof is also winning on other fronts as well.

On Aug 12, Censof announced that it has secured a contract worth RM14.6mil for the provision of an information system from the Penang Development Corp (PDC).

The development phase of the enterprise-wide financial management information system, valued at RM7.34mil, will run for one year from Sept 1.

This will be followed by the maintenance phase, which will continue for five years until Aug 31, 2031. The value of the maintenance phase is RM7.3mil. PDC is a development agency of the Penang state government.

Last year, Censof bagged a RM9.46mil contract from the Road Transport Department for the maintenance, verification and calibration services of 48 weighing instruments at enforcement stations.

However, in terms of results, it posted less-than sterling performance in the fourth quarter ended March 31, 2024 (4Q24).

Censof reported a 41.3% drop in net profit to RM2.18mil in 4Q24 from RM3.72mil a year ago on the back of a 7.9% decrease in revenue to RM31.22mil from RM33.9mil.

In the full financial year 2024 (FY24), its net profit dipped to RM4.62mil from RM5.9mil in the previous year despite registering slightly higher revenue of RM104.74mil versus RM102.47mil.

The company saw reduced contributions from the digital technology segment, as well as the Financial Management Solution – Government and Financial Management Solution – Commercial & SME segments. These two divisions continued to generate the bulk of the group’s revenue.

These decreases were attributed to delays in public sector projects and stiff competition in private sector international markets, particularly Singapore and Hong Kong.

The drop in revenue was somewhat mitigated by the growth in its wealth management solution and digital technology segments, which grew 25.9% and 23.8% year-on-year, respectively.

This growth was driven by new projects secured from banks in Indonesia and Malaysia and increased utilisation of e-procurement solutions, etender platforms and cloud hosting services by existing customers.

Moving forward, the company says it is poised for a resilient performance in FY25 as it focuses on innovation, regional expansion, operational excellence and a robust resource strategy.

It has a project-based order book of RM37.5mil and recurring maintenance revenue worth RM44.9mil, providing strong revenue streams over the next few financial years.