Thursday, July 28, 2011

CBSA ... Jul11

CBSA is steadily making its mark in the information technology (IT) and advertising industries.

In mid-June 2011, CBSA entered into an agreement with Google to provide it with business listings in six Southeast Asian countries for tabulation of Google Maps. The countries are Malaysia, Singapore, Indonesia, Thailand, the Philippines and Vietnam.

CBSA will receive licence fees for the licensed content provided and annual update fees for a period of five years, which is renewable after the expiry of the initial term.

To recap, in 2007 CBSA embarked on a partnership with Google to include business listings from its Superpages website in Google Maps for the latter to tabulate the locations on Google Maps. This newly signed agreement extended this partnership to include business listings from CBSA’s in Singapore, Indonesia, Thailand, the Philippines and Vietnam.

CBSA, which was founded in 1996 and listed in 2004, has two business divisions.

The IT unit contributed 70% of its total revenue, or RM7.14 million, for 1QFY11 ended March 31 with the balance from the search and advertising division. The IT division, which the company started with, specialises in radio frequency identification, e-procurement, e-security and enterprise management solutions.

The expansion into search and advertising came in September 2009, when CBSA acquired Infodata Media Sdn Bhd, which owns Super Pages, a classified business directory and Malaysia’s leading business trade portal.

With the acquisition, CBSA now has a bigger recurring income base compared with its project-based IT business, as some 80% of Super Pages advertisers are reportedly repeat customers.

CBSA will receive licence fees and annual update fees amounting to 10% of the initial licence fees during the duration of the new agreement with Google. Charges will now be based on per business listing as opposed to the bundled arrangement under the previous agreement.

CBSA’s revenue has grown by a compounded annual growth (CAGR) rate of 24% between FY06 ended Dec 31 and FY10. Its net profit CAGR was 16% between FY06 and FY10.

For FY10, the company earned a pre-tax profit of RM11.41 million and net profit of RM10.5 million, on the back of revenue totalling RM46.58 million.

For 1QFY11 though, pre-tax profit declined 24.8% year-on-year to RM2.8 million while net profit fell 20.1% to RM2.57 million. The decline in profitability was due to a high base effect in 1QFY10, which included a one-off RM1.74 million gain on the disposal of land. Stripping out the one-off gain.

As at March 31, 2011, CBSA had some RM9.84 million cash and no borrowings, equivalent to net cash per share of 4.1 sen. Its net assets per share stood at 24 sen as at March 31 2011.

The company is also looking at some new businesses to enhance value for its customers. It is looking at how to provide software as a service (SAAS) to the SMEs as well.

The company was inspired to become not just a technology company in its home country, but one that provides a whole spectrum of ICT (information and communications technology) services to its clients in Asia.

It remains to be seen if CBSA, with its latest extension of its licence tie-up with Google, can ride the wave and fulfil its vision “to be the most innovative and trusted IT and search company in Southeast Asia”. If it succeeds, CBSA could well be one of the country’s few successful homegrown technology stories.

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