This article first appeared in The Edge Financial Daily on June 13, 2019 - June 19, 2019

KUALA LUMPUR: ACE Market-listed Wegmans Holdings Bhd, a home furniture maker, said it has submitted a proposal to transfer its listing to the Main Market of Bursa Malaysia.

In a press statement yesterday, Wegmans managing director Keh Wee Kiet said the company has met the criteria for the transfer, including meeting the profit track record, public shareholding spread, healthy financial position and liquidity.

“This signifies the financial strength of our group, and we shall continue to build on the solid foundation moving forward,” he added.

After making adjustments to exclude non-recurring nature and items not in its ordinary business, Wegmans’ adjusted aggregate profit after tax (PAT) for the past three years amounted to RM40.55 million, with a PAT of RM11.82 million for the financial year ended Dec 31, 2018 (FY18).

Wegmans said it has exceeded the profit requirements for the migration to the Main Board, which requires the group to have an aggregate PAT of at least RM20 million for the past three full financial years, as well as a PAT of at least RM6 million for the most recent financial year.

Wegmans’ cash balance was at RM11.17 million and net cash flow from operating activities stood at RM14.13 million as at end-December 2018. Its current ratio remained healthy at 1.65 times.

As at June 3, Wegmans has a public shareholding spread of about 30% comprising 1,473 public shareholders holding not less than 100 ordinary shares each, exceeding the minimum requirement of 25% public shareholding in the hands of 1,000 public shareholders.

“The proposed transfer is a major milestone for us. The exercise forms part of our efforts to enhance the group’s credibility, prestige and reputation, while according our group with greater recognition and acceptance by investors, particularly institutional shareholders.

“In addition, the proposed transfer shall enhance the confidence of all our stakeholders and better reflect our group’s current scale of operations. We will also have enhanced access to the broader capital market to fund our future growth plans,” said Keh.

The proposed transfer is subject to approvals from the Securities Commission Malaysia, Bursa Securities and any other relevant authority, if required. The application for the proposed transfer shall be made within two months, and barring unforeseen circumstances and subject to all relevant approvals being obtained, the exercise is expected to be completed by the fourth quarter of 2019.

Wegmans was listed on the ACE Market in March last year. Yesterday, its share price closed one sen higher at 32 sen, giving it a market capitalisation of RM160 million.