KUALA LUMPUR (Sept 26): Southern Score Builders Bhd (KL:SSB8) said the Securities Commission Malaysia (SC) has rejected the company's application to transfer its listing from the ACE Market to the Main Market of Bursa Malaysia.
The rejection came after the SC declined to grant the company relief from complying with the requirement for ‘positive operating cash flow’ under the profit test.
“Pursuant to the non-approval of the relief application, the SC had decided not to approve the proposed transfer under Section 214A(1)(a) of the Capital Markets and Services Act 2007,” Southern Score said in a filing with the exchange on Friday.
“The board will deliberate on the company’s next course of action and will make the relevant announcements in accordance with the ACE Market Listing Requirements of Bursa Securities in due course.”
According to Southern Score's earlier filing in late March, the relief was sought as the company reported negative net cash from operating activities of RM10.35 million for the six-month period ended June 30, 2023. The change in its financial year end to June 30 meant cash flow was presented based on its audited consolidated results for the financial period ended June 30, 2023, it explained earlier.
Under the SC’s equity guidelines, companies seeking a Main Market transfer under the profit test must demonstrate a healthy financial position, including positive operating cash flow over the profit track record period based on audited financial statements.
For comparison, Southern Score posted positive operating cash flow of RM1.4 million for the 12 months ended June 30, 2024 (FY2024), alongside RM9.96 million in FY2022 and RM40.87 million in FY2021.
The company has satisfied the profit requirements, recording an aggregate after-tax profit of at least RM20 million over the past three to five financial years, and after-tax profit of at least RM6 million for FY2024.
Southern Score had proposed the transfer in October 2024, nearly two years after its ACE Market listing in November 2022 at an initial public offering price of 55 sen per share.
The stock closed half a sen or 0.85% lower at 58 sen on Friday, giving the company a market capitalisation of RM1.31 billion. The counter has fallen over 4% year to date.