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Colform Group Berhad’s Q1 2025 Performance: Navigating Growth Amidst Listing Milestones
May 29, 2025
Greetings, fellow investors and market enthusiasts! Today, we’re diving into the latest financial report from Colform Group Berhad, a company that recently made its debut on the ACE Market of Bursa Malaysia on February 10, 2025. This first interim financial report for the first quarter ended March 31, 2025, offers us a crucial initial look into their performance post-listing.
While the report reveals a solid revenue stream and profitability, it also highlights the significant impact of one-off listing expenses and seasonal factors on the bottom line. Let’s break down the numbers and understand what this means for Colform’s journey ahead.
Key Takeaway: Colform Group Berhad reported a revenue of RM18.58 million and a Profit After Tax (PAT) of RM1.29 million for Q1 2025. Notably, the quarter’s profitability was significantly affected by RM2.71 million in non-recurring listing expenses, which, if adjusted, would show a much healthier profit margin.
Core Financial Highlights: A Snapshot of Q1 2025
As this is Colform’s inaugural interim report post-IPO, there are no comparative figures for the preceding corresponding quarter (Q1 2024). However, we can still analyze the current quarter’s performance and compare it against the immediate preceding quarter (Q4 2024) to gauge recent trends.
Overall Performance in Q1 2025
For the first quarter ended March 31, 2025, Colform Group Berhad achieved a revenue of RM18.58 million. This revenue primarily stemmed from their core business activities:
- Manufacturing of downstream steel products and processing of steel coils: Contributed RM12.20 million, representing 65.64% of total revenue.
- Trading of other downstream steel products and building materials: Accounted for RM3.61 million, or 19.42% of revenue.
- Provision of supply and installation services and project management services for construction projects: Generated RM2.78 million, making up 14.94% of revenue.
The Group reported a Profit Before Tax (PBT) of RM2.61 million and a Profit After Tax (PAT) of RM1.29 million. This translates to a PBT margin of 14.05% and a PAT margin of 6.94%.
However, it’s crucial to note the impact of non-recurring listing expenses. The administrative expenses for the quarter included RM2.71 million in these one-off listing costs. To provide a clearer picture of operational profitability, let’s look at the adjusted figures:
Adjusted Profitability (Excluding Listing Expenses):
- Adjusted PBT: RM5.32 million (RM2.61 million + RM2.71 million)
- Adjusted PBT Margin: 28.63%
- Adjusted PAT: RM4.00 million
- Adjusted PAT Margin: 21.53%
These adjusted figures paint a much stronger picture of Colform’s underlying operational efficiency.
Quarter-on-Quarter (QoQ) Performance Comparison
Comparing Q1 2025 with the preceding quarter, Q4 2024, reveals some interesting dynamics:
Q1 2025
Revenue: RM18.58 million
Profit Before Tax: RM2.61 million
Profit After Tax: RM1.29 million
Q4 2024
Revenue: RM23.75 million
Profit Before Tax: RM5.88 million
Profit After Tax: RM4.36 million
The Group’s revenue decreased by RM5.17 million, or 21.76%, compared to Q4 2024. This reduction was primarily attributed to fewer working days during the current financial quarter due to festive holidays, which led to lower activity levels and reduced demand from contractor customers across both manufacturing and trading segments.
Similarly, PBT saw a decrease of RM3.27 million (55.62%), and PAT dropped by RM3.07 million (70.39%). As mentioned, these declines were mainly due to the significant impact of the RM2.71 million in non-recurring listing expenses. Without these one-off costs, the adjusted PBT would have been RM5.32 million, showing an adjusted PBT margin of 28.63%.
Financial Health: Balance Sheet & Cash Flow
Colform’s balance sheet as at March 31, 2025, shows a stronger financial position compared to December 31, 2024, largely due to the successful IPO:
| Item | 31 March 2025 (RM’000) | 31 December 2024 (RM’000) | Change (RM’000) |
|---|---|---|---|
| Total Assets | 153,212 | 117,321 | +35,891 |
| Total Equity | 137,279 | 96,092 | +41,187 |
| Total Liabilities | 15,933 | 21,229 | -5,296 |
| Cash & Bank Balances | 57,545 | 12,641 | +44,904 |
| Net Assets Per Share (RM) | 0.23 | 0.16 | +0.07 |
The substantial increase in total assets and equity is primarily driven by the RM41.19 million gross proceeds raised from the IPO. This inflow significantly boosted the cash and bank balances, reflecting a robust liquidity position. Concurrently, total liabilities saw a decrease, suggesting improved financial leverage.
From a cash flow perspective, Q1 2025 saw net cash used in operating activities of RM0.518 million and in investing activities of RM0.242 million. However, these were more than offset by a significant net cash inflow from financing activities of RM36.808 million, predominantly from the IPO proceeds. As a result, cash and cash equivalents increased by RM36.048 million, bringing the total cash and cash equivalents to RM62.735 million at the end of the period.
Risks and Prospects: Charting the Future
The Road Ahead: Positive Prospects
Colform Group is optimistic about its future, largely buoyed by the positive outlook for Malaysia’s construction industry. Data from the Department of Statistics Malaysia (DOSM) indicates a steady upward trend in construction work value from 2020 to 2024. This growth is expected to continue, driven by ongoing infrastructure development, strategic investments, and government initiatives, all of which will fuel demand for downstream steel products.
Colform’s integrated business model, which spans in-house steel processing, manufacturing, trading, and supply/installation services, positions them well to meet diverse construction industry needs. The company plans to leverage its IPO proceeds to implement strategic expansion plans, including setting up a colour coil coating production line, constructing a new storage facility, and expanding into Peninsular Malaysia. These initiatives are anticipated to positively contribute to future performance and broaden their customer base, ensuring sustainable long-term growth.
IPO Proceeds Utilisation Status (as at 31 March 2025):
| Details of use of proceeds | Proposed Utilisation (RM’000) | Amount Utilised (RM’000) | Balance Unutilised (RM’000) | Estimated timeframe for utilisation from the date of Listing |
|---|---|---|---|---|
| Setting up colour coil coating production line | 9,000 | 1,816 | 7,184 | Within 18 months |
| Construction of a storage facility | 4,500 | – | 4,500 | Within 18 months |
| Business expansion to Peninsular Malaysia | 5,100 | – | 5,100 | Within 30 months |
| Working capital | 18,093 | 502 | 17,591 | Within 24 months |
| Listing expenses | 4,500 | 4,500 | – | Within 1 month |
| Total | 41,193 | 6,818 | 34,375 |
Potential Challenges to Monitor
While the outlook is positive, there are factors to keep an eye on. The significantly higher effective tax rate for Q1 2025 (50.59% compared to the statutory 24%) was primarily due to the non-recurring listing expenses. While the adjusted effective tax rate (24.84%) is closer to the statutory rate, it’s a reminder of how one-off events can skew financial metrics.
Additionally, the contingent liability regarding a land construction covenant from 2010, where an extension of time for completion was applied but no response from the Authority has been received, presents a minor uncertainty. Although the company has not made any provision due to the remote nature of the computation, it is a point to monitor.
Summary and
Colform Group Berhad’s first quarterly report post-IPO provides a foundational insight into its operational and financial standing. Despite the short-term impact of festive holidays and significant one-off listing expenses on the Q1 2025 profitability, the underlying business appears resilient. The adjusted profit figures paint a more accurate picture of their core operational performance, demonstrating healthy margins.
The successful IPO has substantially strengthened the company’s balance sheet and cash position, providing ample resources for strategic expansion plans outlined in their prospectus. These plans, focusing on enhancing production capabilities and market reach, are crucial for their long-term growth trajectory. The positive outlook for Malaysia’s construction sector further supports Colform’s prospects, as demand for their steel products and services is expected to remain robust.
Key points to consider from this report include:
- The significant impact of non-recurring listing expenses on reported profit.
- The strong cash position and bolstered equity post-IPO, providing financial flexibility.
- Strategic utilisation of IPO proceeds for long-term growth initiatives.
- The reliance on the positive trajectory of the Malaysian construction industry.
- The contingent liability related to the land covenant, although currently deemed remote.
Overall, Colform Group Berhad seems to be in a good position to execute its growth strategies, leveraging its integrated business model and strong financial foundation. The immediate future will see the deployment of IPO funds into key projects, which should drive operational improvements and expand market presence.
