SHL Consolidated Bhd: A Deep Dive into Q4 FY2025 – Navigating Challenges with Strong Cash Flow
Greetings, fellow investors and market enthusiasts! Today, we’re unboxing the latest financial report from SHL Consolidated Bhd for its fourth quarter ended 31 March 2025. This report offers a fascinating, albeit mixed, picture of the company’s journey, revealing a significant dip in revenue and profit compared to the previous year, yet simultaneously showcasing a remarkable surge in cash flow and a commitment to shareholder returns through recent dividends. Is this a temporary setback or a strategic shift? Let’s dive into the numbers and uncover the story behind SHL’s performance.
Core Data Highlights: A Tale of Two Halves
SHL Consolidated Bhd’s latest report presents a contrasting performance. While the top-line figures saw a notable decline, the underlying financial health, particularly cash generation, appears robust. Let’s break down the key figures:
Quarterly Performance (Q4 FY2025 vs. Q4 FY2024)
Current Quarter (31 Mar 2025)
Revenue: RM29.52 million
Profit Before Taxation: RM5.84 million
Profit for the Period: RM3.53 million
Profit Attributable to Equity Holders: RM3.52 million
Basic & Fully Diluted EPS: 1.45 sen
Preceding Quarter (31 Mar 2024)
Revenue: RM87.13 million
Profit Before Taxation: RM39.43 million
Profit for the Period: RM30.36 million
Profit Attributable to Equity Holders: RM30.29 million
Basic & Fully Diluted EPS: 12.51 sen
The fourth quarter of the financial year ending March 2025 saw SHL’s revenue drop by a substantial 66.1% to RM29.52 million from RM87.13 million in the same quarter last year. This significant reduction carried through to profitability, with profit before taxation plummeting by 85.2% and profit attributable to equity holders falling by 88.4%. Consequently, basic earnings per share (EPS) declined sharply from 12.51 sen to just 1.45 sen.
Year-To-Date Performance (FY2025 vs. FY2024)
Current Year-To-Date (31 Mar 2025)
Revenue: RM124.09 million
Profit Before Taxation: RM50.60 million
Profit for the Period: RM41.09 million
Profit Attributable to Equity Holders: RM40.75 million
Basic & Fully Diluted EPS: 16.83 sen
Preceding Year-To-Date (31 Mar 2024)
Revenue: RM235.35 million
Profit Before Taxation: RM93.73 million
Profit for the Period: RM75.35 million
Profit Attributable to Equity Holders: RM74.90 million
Basic & Fully Diluted EPS: 30.93 sen
For the full financial year ended March 2025, the trend is similar. Revenue decreased by 47.3% to RM124.09 million from RM235.35 million in the prior year. Profit before taxation also saw a 46.0% decline, while profit attributable to equity holders was down by 45.6%. This resulted in a year-on-year EPS drop from 30.93 sen to 16.83 sen.
Understanding the Performance Shift: Inventory and Business Segments
The report attributes the decrease in revenue primarily to a reduction in inventory stock from the previous year, which led to a decreased sale of inventory compared to the preceding year. Despite this, the company managed to maintain its profit margin, indicating efficient cost management.
From a segmental perspective, the Property Development and Services segment remains the largest contributor to both revenue and operating profit, although it too experienced a decline in performance year-on-year. Other segments like Construction, Trading, Manufacturing, and Quarrying also saw varied performances, reflecting the broader market conditions.
A Strong Balance Sheet and Cash Flow Surge
While the profit figures might raise eyebrows, SHL’s balance sheet and cash flow statement tell a more reassuring story. The company’s total assets stood at RM1.03 billion as of 31 March 2025, slightly down from RM1.04 billion last year. Net assets per share remained stable at RM3.87.
A significant highlight is the robust cash position. Cash, deposits, and short-term investments increased impressively to RM385.65 million as of 31 March 2025, up from RM318.80 million a year ago. This substantial increase is largely driven by a remarkable improvement in cash flow from operating activities, which surged to RM101.75 million for the financial year, a massive leap from RM7.85 million in the previous year. The report explains this by highlighting the conversion of contract assets into cash upon obtaining the Certificate of Completion and Compliance (CCC) under the ‘Build Then Sell’ schedule. This indicates healthy project completion and cash collection.
Navigating the Market: Risks and Prospects
SHL Consolidated Bhd operates within the dynamic Malaysian property development and construction sectors. The company’s outlook is intrinsically linked to the broader economic environment.
The Malaysian economy recorded a 5% growth in the fourth quarter of 2024, primarily fueled by strong domestic demand, a recovering labour market, and continued policy support. While external demand is anticipated to moderate, potentially creating headwinds, the domestic front is expected to remain firm. Furthermore, investment activities are projected to improve, bolstered by the realisation of multi-year projects across the country.
In response to this environment, SHL remains strategically focused on its core business: building landed properties and affordable value homes. Their key development areas include Bandar Sungai Long, Goodview Heights in Sungai Long South, Alam Budiman in Shah Alam, and Rasa in Batang Kali – all strategically located within Selangor, a primary economic hub in Malaysia. The Board of Directors expresses cautious optimism for the Group’s performance in the upcoming financial year, provided no unforeseen circumstances arise.
Summary and
SHL Consolidated Bhd’s latest financial report paints a picture of a company undergoing a period of adjustment in its revenue and profit lines, largely due to inventory management and project completion cycles. However, the underlying financial strength, particularly the significant improvement in cash flow from operations and a healthy cash reserve, stands out as a strong positive. The successful conversion of contract assets into cash demonstrates efficient project execution and collection. The company’s continued focus on the resilient affordable and landed property segments in Selangor positions it to navigate future market conditions.
While the overall economic environment presents both opportunities and challenges, SHL’s management remains cautiously optimistic, banking on domestic demand and ongoing investment activities. The recent dividend payment of 18 sen per share for the financial year ended 31 March 2024, paid in October 2024, also underscores the company’s commitment to returning value to its shareholders.
Key points to consider:
- The significant year-on-year decline in revenue and profit is mainly attributed to inventory stock reduction and the timing of property development project completions.
- Despite the revenue dip, profit margins were maintained, suggesting effective cost control.
- A substantial increase in cash and cash equivalents, driven by strong operating cash flow and conversion of contract assets, indicates robust financial health.
- The company’s strategic focus on landed and affordable homes in Selangor aligns with current market demand and economic trends.
- The Board’s cautious optimism for the upcoming financial year suggests a steady, rather than explosive, growth trajectory.
What are your thoughts on SHL Consolidated Bhd’s latest performance? Do you believe their focus on cash generation and affordable housing will help them overcome the current revenue headwinds? Share your views in the comments below!
