KUALA LUMPUR (Dec 31): Oxford Innotech Bhd, a company specialising in precision engineering components, mechanical assembly, and automation and robotics solutions, is planning an initial public offering on the ACE Market of Bursa Malaysia to raise funds for its capacity expansion and working capital.

The IPO will involve up to 194.46 million shares, comprising a public issue of 143.46 million new shares (20.21% of its enlarged capital) and an offer for sale of 50 million existing shares (7.04%) at a price to be fixed, its draft prospectus filed with Bursa showed. Altogether, its IPO offers the public a 27.25% stake in the company.

The existing shares are being sold by the group's managing director Ng Thean Gin, his spouse and the group's executive director Lee Lai Chan, and executive directors Teh Teng Wah and Oh Yen San. Ng and Lee currently hold a combined 56.61% stake in the group, which will drop to 42.35% post-IPO, while Teh’s shareholding will be reduced from 19.92% to 13%, and Oh’s from 10.58% to 7.32%.

Oxford Innotech currently operates five manufacturing facilities, primarily located in Penang. Funds raised from the issuance of new shares will be used to finance the construction of a new factory, purchase new machinery and support general working capital needs.

Oxford Innotech serves customers from the semiconductor, electrical and electronics (E&E), telecommunications, ergonomic furniture and automotive sectors. It also provides services to companies involved in manufacturing modular building systems.

For the six months ended June 30, 2024 (6MFY2024), the company made an audited profit after tax (PAT) of RM9.82 million on revenue of RM55.96 million, exceeding its full FY2023 PAT of RM8.05 million, when it made a revenue of RM49.53 million.

In FY2022, the group logged a PAT of RM8.21 million, a slight uptick from RM7.16 million in FY2021, as revenue rose to RM33.58 from RM25.13 million.

The company’s gross profit margin dropped in recent years, from 40.95% in FY2021 to 38.24% in FY2022, which dipped to 35.84% in FY2023, and further to 32.62% in 6MFY2024.

As of end-June 2024, the company held cash and bank balances of RM13.22 million and short-term funds of RM6.47 million, while borrowings totalled RM27.16 million, resulting in a gearing ratio of 0.32 times.

Malacca Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO, with Wyncorp Advisory Sdn Bhd serving as the corporate finance adviser.