KUALA LUMPUR (Jan 27): Digital media and advertising solution company Catcha Digital Bhd (KL:CATCHA) has proposed to diversify into information technology (IT) solutions.
The move follows the company’s acquisition of a 51% stake in software-as-a-service (SaaS) provider Nexible Solutions Sdn Bhd for RM11.38 million, according to Catcha in a bourse filing on Monday.
Currently, Catcha’s digital media advertising business via iMedia Asia Sdn Bhd is the company’s only revenue generator, which was acquired back in 2011. It operates 13 digital media publishers, including Goody, Oh! Media, Kimchi Daily, Beautiful Nara, Moretify, Weirdkaya, and The Reporter.
The deal includes a profit guarantee of RM700,000 for the financial year ended Dec 31, 2024 (FY2024), RM1.2 million for FY2025, RM2.2 million for FY2026 and RM3.3 million for FY2027 by Nexible.
“In view of Nexible’s expected PAT (profit guarantee) and the favourable outlook for the global enterprise IT solutions market, the board anticipates that, barring any unforeseen circumstances, 25% or more of the group’s net profit will be contributed from IT solutions by FY2025,” Catcha said.
“The group intends to diversify its business to include the IT solutions business, and thus, the board proposes to seek approval from its shareholders for the proposed diversification,” it added.
Nexible is 85%-owned by Ananprakash Saminathen and 15% by Alagess Deraraj. The 51% stake in Nexible that Catcha is purchasing comprises 35.7% from Ananprakash and 15.3% from Alagess.
For the third quarter ended Sept 30, 2024 (3QFY2024), Catcha posted a threefold jump in net profit to RM1.23 million from RM326,000 in 3QFY2023, as revenue rose 54.97% to RM11.14 million versus RM7.19 million.
Catcha exited Guidance Note 2 (GN2) status in July 2023, after completing its regularisation plan. The company slipped into GN2 status in August 2017, following the sale of its then digital asset Rev Asia Holdings Sdn Bhd to Media Prima Bhd (KL:MEDIA) for RM105 million.
Shares in Catcha ended two sen or 5.26% higher at 40 sen on Monday, giving the ACE Market-listed company a market capitalisation of RM140.83 million.