Signature Alliance to raise RM161m from ACE Market IPO
KUALA LUMPUR: Interior fitting-out specialist Signature Alliance Group Bhd expects to raise RM161.2 million from the ACE Market listing of Bursa Malaysia.
The company plans to use RM88 million (54.6%) of the proceeds raised from the initial public offering (IPO) to establish a new corporate office and production facility in Selangor to increase automation and further strengthen its project delivery capabilities.
A further RM30.1 million (18.7%) of the proceeds will be used for working capital purposes to meet the requirements for its interior fitting-out projects.
The remainder of the proceeds will be used to repay bank borrowings amounting to RM20 million (12.4%), RM12 million (7.4%) to expand and establish branch offices in Pulau Pinang and Johor to strengthen the company's presence regionally in Peninsular Malaysia, RM4 million (2.5%) to acquire additional machinery and equipment for the production facility, and the remaining RM7.1 million (4.4%) to defray the estimated listing expenses.
Executive director and group CEO Darren Chang said with the ongoing growth and expansion of its business, the company intends to centralise offices and production activities for the customisation of carpentry/joinery parts and integral fixtures, and the manufacturing of wooden furniture to improve the overall efficiency of its production process.
'Presently, we are unable to customise and manufacture sufficient carpentry and joinery parts, integral fixtures, and wooden furniture for all of our existing projects using our own production facilities.
'This is primarily due to the growing number of interior fitting-out projects we continue to secure and deliver, each requiring varying degrees of customisation.
'Additionally, the differing profiles and specifications of the carpentry, joinery parts, fixtures, and wooden furniture needed for each project further strain our production capacity.
'These challenges are compounded by the space constraints in our existing facilities, which limit our ability to scale up manufacturing to meet demand effectively,' Chang said.
He said the company intends to construct its production facility, and upon commencing operations of this new facility, it intends to produce all carpentry/joinery parts, integral fixtures, and wooden furniture required internally for all projects undertaken in Peninsular Malaysia.
'Similarly, the new corporate office will enable us to centralise our staff force in Klang Valley under one location and provide space for future hires in line with our expected business growth,' Chang said.
For the past four financial years (FY) ending Dec 31, 2021, to Dec 31, 2024, and up to April 16, 2025, Signature Alliance has completed 624 interior fitting-out projects with a combined value of RM391.6 million.
As of April 16, 2025, the company has 69 ongoing projects with a total contract value of RM902.4 million and an unbilled contract value of RM388.6 million, or 43.1% of the total value.
For the financial year ended Dec 31, 2024 (FY24), Signature Alliance net profit jumped 290.4% to RM40.6 million from RM10.4 million a year ago (FY23) on higher gross profit and net gain on impairment of financial assets and contract assets.
FY24's revenue rose 122.6% to RM386 million from RM173.4 million in FY23.
During the period, the company's gross profit expanded to RM81.7 million, translating to a margin of 21.2%, versus 16.9% in FY23, due to a mix of contributions from interior fitting-out projects with higher gross profit margins.
Net profit margin for FY24 also improved to 10.5% from 6% a year ago.
Under the listing exercise, Signature Alliance is issuing 260 million new shares representing 26% of its enlarged share capital.
There is no sale of existing shares.
Out of the 260 million new shares, 50 million new shares will be made available to the Malaysian public via balloting; 30 million new shares for its eligible directors, employees of Signature Alliance and persons who have contributed to the success of the company under the Pink Form Allocations while 20 million new shares are reserved for application by the entitled shareholders of Signature International Bhd under the restricted offering.
The remaining 160 million new shares will be placed out to Bumiputera investors approved by the Ministry of Investment, Trade and Industry and selected investors.
At an IPO price of RM0.62 per share, Signature Alliance's market capitalisation is projected to be RM620 million, based on its enlarged share capital of 1 billion shares.
The IPO is open for subscription until May 21, 2025.
Signature Alliance's listing on the ACE Market of Bursa Securities is tentatively scheduled for June 5, 2025.
M&A Securities Sdn Bhd is the adviser, sponsor, managing underwriter, joint underwriter and joint placement agent, while Affin Hwang Investment Bank Bhd is the joint underwriter and joint placement agent for the IPO exercise.
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