Monday, April 18, 2011

Fututech/E&O ... Apr11

Loss making company, a former associate of E&O is poised to transform itself into a construction company.

The company, currently a designer of lights and kitchen cabinets has seen a change in shareholders with the exit of E&O and entry of new shareholders who are in the construction business.

In fact, prior to E&O’s exit in March 2011, changes had already started to appear in Fututech, with the company obtaining construction related jobs. The work was from E&O Property Development Sdn Bhd. It has been awarded some rm333 million worth of design, road and construction works by E&O.

But with the exit of E&O as a major shareholder, can Fututecch continue to be the beneficiary of projects from the property developer?

Industry observers say that it is likely to be the case as the new shareholders of Fututech are no strangers to E&O.
E&O’s divestment will allow Fututech to become an entity focused on construction.

Fututech has been loss making since 2005, accumulating losses of rm31.3 million up to FY2010 ended Dec 31, 2010. However in FY2010, Fututech reported that its net losses narrowed.

The company says it managed to narrow its losses due to the positive contribution of the group’s new construction management business and the gains from the disposal of a subsidiary’s land and building in 2010. Its core businesses appeared not to be doing well as the company was in a negative operating cash flow position of rm9.78 million as at Dec 31, 2010.

As at Dec 2010, Fututech had cash and cash balances of rm5.06 million and was in a net cash position of rm4.84 million.

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