Cuscapi may pay dividend by 2010

SHAH ALAM: Cuscapi Bhd, a homegrown software solutions developer, may reward its shareholders with a dividend by 2010 if its regional expansion bears fruit.

“We intend to move towards a dividend-based company, but first the numbers need to be justified. Nevertheless, we will continue to look into ways of rewarding our shareholders through dividends as our business grows,” its chief executive Danny Leong Kah Chern told The Edge Financial Daily in an interview.

Cuscapi, formerly known as Datascan Bhd, expected contribution from its international business to double in the current fiscal year ending Dec 31, 2008 (FY08) from 8% in FY07, backed by its presence in China, he said.

The Mesdaq-listed firm had in March 2008 established a wholly-owned subsidiary, Cuscapi Beijing Co Ltd, to tap into China’s fast-growing food & beverage (F&B) industry.

Our plan is to always make profit, or at least break even, within the first year of our expansion into a specific overseas market. For China, we expect to see earnings coming in by the second quarter (ended June 30, 2008),” he said, adding that Cuscapi had allocated RM2 million for its expansion into China.

Leong said Cuscapi, which is mulling the transfer of its listing to the Main Board by 2010, also planned to gain a foothold in Thailand by year-end. It will then explore the possibility of forming joint ventures with local players in Indonesia, the Philippines and the Middle East .

It has been reported that the company is also planning to float its overseas assets in London, Singapore or Hong Kong in the next three years.

“This is the year for us to grow our presence regionally, but we will always make sure our bottom line won’t be affected much. Our strategy is for the long term,” Leong said.

He also said the company would be able to sustain its earnings growth amid higher operating expenses partly via the recurring income from its managed services, which contributed about 23% to its total revenue of RM38.7 million in FY07, a 4% year-on-year increase.

The company’s net profit for its first quarter ended March 31, 2008 (1QFY08) dipped 84.28% to RM210,000 from RM1.34 million a year earlier despite revenue increasing by 6.19% to RM7.89 million from RM7.43 million, due to higher operating costs and international business development.

Cuscapi said it had secured Kentucky Fried Chicken (KFC) Cambodia as its client with the installation of its solution for restaurant operations in the KFC store in Phnom Penh.

“Cuscapi’s entry into the Cambodian F&B market is timely as the market is growing well, spurred by the tremendous growth potential of the country’s tourism sector,” said Leong.

The implementation for the second KFC outlet in Cambodia is scheduled to begin at the end of the month.