Hello fellow investors and market watchers! Today, we’re diving into the latest financial heartbeat of REXIT BERHAD, a prominent player in the IT solutions space, as they unveil their unaudited consolidated results for the quarter and period-to-date ended 31 March 2025. This report offers a mixed bag of results, showcasing a dip in performance compared to the same period last year, yet demonstrating a commendable sequential recovery from the immediate preceding quarter. What truly stands out is Rexit’s consistent commitment to shareholder returns, evidenced by their recent dividend announcements. Let’s unpack the numbers and understand the story behind them.
Q1 2025 Performance: A Deeper Look
Rexit Berhad’s first quarter of 2025 presents a nuanced picture. While the year-on-year comparison shows a decline in key financial metrics, a closer look at the sequential performance reveals significant improvements, hinting at a rebound in their core business activities.
Year-on-Year Performance (Q1 2025 vs Q1 2024)
Compared to the corresponding period last year, Rexit experienced a contraction in both revenue and profitability. This was primarily attributed to lower software customisation services.
Q1 2025
Revenue: RM7.913 million
Profit Before Tax (PBT): RM2.800 million
Profit After Tax (PAT): RM2.002 million
Basic Earnings Per Share (EPS): 1.16 sen
Q1 2024
Revenue: RM8.370 million
Profit Before Tax (PBT): RM4.616 million
Profit After Tax (PAT): RM3.433 million
Basic Earnings Per Share (EPS): 1.98 sen
Revenue for the financial year-to-date ended 31 March 2025 decreased by 5.46% to RM7.913 million from RM8.370 million in the preceding year’s corresponding period. This was mainly due to lower software customisation services.
Profit Before Tax (PBT) saw a more significant drop of 39.34%, falling from RM4.616 million to RM2.800 million. This decline was influenced by several factors, including depreciation charges from leasehold improvements, depreciation and lease interest for their new office premises, unrealised foreign exchange losses, and higher staff and directors’ fees.
Consequently, Profit After Tax (PAT) decreased by 41.68%, from RM3.433 million to RM2.002 million.
Sequential Performance (Q1 2025 vs Q4 2024)
In contrast to the year-on-year figures, Rexit’s performance in the first quarter of 2025 showed a strong rebound compared to the immediate preceding quarter (Q4 2024).
Q1 2025
Revenue: RM7.913 million
Profit Before Tax (PBT): RM2.800 million
Profit After Tax (PAT): RM2.002 million
Q4 2024
Revenue: RM7.344 million
Profit Before Tax (PBT): RM1.543 million
Profit After Tax (PAT): RM1.657 million
Revenue for the current quarter improved by 8% compared to the previous quarter, reaching RM7.913 million from RM7.344 million. This positive shift was mainly driven by an increase in software customisation services.
PBT saw a remarkable increase of 81%, jumping from RM1.543 million to RM2.800 million, while PAT rose by 21% to RM2.002 million from RM1.657 million. These significant improvements were largely due to lower direct costs and administrative expenses in the current quarter.
Geographical Contributions
Rexit’s operations are primarily centered in Malaysia and Hong Kong SAR. For the quarter ended 31 March 2025, Malaysia contributed RM6,772,000 in revenue, down from RM7,077,000 in Q1 2024. Hong Kong SAR’s contribution also saw a slight decrease to RM1,046,000 from RM1,076,000. Other countries contributed RM95,000, down from RM217,000.
Financial Health & Cash Position
The Group’s financial health remains robust. As at 31 March 2025, Rexit reported a healthy cash and cash equivalents position of RM31.814 million, an increase from RM28.156 million in Q1 2024. This strong cash position, coupled with the absence of any borrowings or debt securities, underscores the company’s financial stability and liquidity.
Dividends: A Consistent Return to Shareholders
Rexit continues to demonstrate its commitment to returning value to shareholders. The company had previously declared a second interim single tier dividend of 2.5 sen per ordinary share for the financial period ended 31 December 2024, which was paid on 18 February 2025. Furthermore, the Board of Directors has recommended and approved a first interim single tier dividend of 2 sen per ordinary share for the financial year ending 31 December 2025, declared on 21 May 2025 and payable on 26 June 2025. This consistent dividend payout reflects a confident outlook on the company’s future earnings capability.
Risks and Prospects: Navigating the Market
Looking ahead, Rexit acknowledges the prevailing market uncertainties. The company anticipates a cautious outlook, primarily due to geo-political risks that could impact the domestic market. While the recent sequential improvement in software customisation services is a positive sign, the broader economic landscape and potential disruptions from global events remain key considerations.
Rexit’s strategy appears to involve adapting to these market dynamics, focusing on managing direct and administrative costs, as evidenced by the improved profitability in the latest quarter compared to the previous one. Their strong cash reserves also provide a buffer against potential headwinds and flexibility for strategic initiatives.
Summary and
REXIT BERHAD’s Q1 2025 report paints a picture of resilience amidst a challenging environment. While the year-on-year figures show a decline, the strong sequential rebound in revenue and profitability is a positive indicator of operational efficiency and a potential recovery in core services. The company’s robust cash position and consistent dividend payouts further underscore its financial stability and commitment to shareholders.
However, the acknowledged geo-political risks impacting the domestic market warrant continued monitoring. The company’s ability to sustain the momentum seen in the sequential quarter and navigate these external challenges will be crucial for its future performance.
It is important to note that this analysis is for informational purposes only and does not constitute any form of investment advice or recommendation to buy or sell shares. Investors should conduct their own thorough due diligence and consult with a qualified financial advisor before making any investment decisions.
Key points to watch for in future reports include:
- The sustained growth of software customisation services.
- The impact of depreciation and other operating costs on profitability.
- Management’s strategies to mitigate geo-political risks.
- Continued strength in cash flow and balance sheet.
What are your thoughts on Rexit’s latest performance? Do you believe the sequential recovery is a strong signal for the coming quarters, or do the geo-political risks overshadow this positive trend? Share your insights in the comments below!
