LMS Compliance has completed its acquisition of a 75% stake in novel food certification and registration services provider, Anchor Technology Holdings, on July 11. Anchor Technology Holdings is now a 75%-owned indirect subsidiary of LMS Compliance.

 

The acquisition was first announced on Jan 27, when LMS Compliance said it will be acquiring the stake for US$4.51 million or $5.98 million at the time.

 

Under the terms of the sale and purchase agreement (SPA), the first tranche of the payment consideration has been paid.

 

Of the consideration, a cash payment of US$816,373 or $1.08 million has been paid. LMS Compliance has also issued 9.5 million new ordinary shares at 42 cents apiece or US$2.99 million. The price per share reflects a 15% premium to the six-month volume-weighted average price (VWAP) of the shares in LMS Compliance immediately before July 11.

 

The new shares represent 8.3% of LMS&rsquo s enlarged issued and paid-up share capital.

 

The first tranche accounts for about 84.5% of the total purchase consideration for the acquisition of Anchor Technology Holdings.

LMS Compliance plans to acquire a 75% equity stake in Anchor Technology Holdings Co, a food certification and registration services provider, for around US$4.51 million.

 

LMS plans to fund 66% of this acquisition by issuing new shares.

 

The shares will be priced at a premium of 15% over the six-month volume weighted average price (VWAP) six months prior to the completion date of the proposed acquisition, subject to a minimum issue price of 29.7 cents.

 

This 29.7-cent level represents a level of discount not exceeding 10% to the VWAP per LMS share of 33 cents on Jan 22, which is the last market day on which the LMS shares were traded just before the deal was signed. LMS will pay the remaining 34% via cash.

 

LMS says this deal will boost its testing and certification business, as well as generate future revenue streams and operating cash flows.

 

It will further strengthen its geographical footprint in the Asian region with the target' s operations in Hong Kong, Shanghai and Hainan.

 

LMS Compliance' s executive director and CEO Louis Ooi calls the deal a " significant milestone" in the company' s " growth trajectory" . 

 

" By integrating their specialised certification and regulatory consulting services for the novel food development sector into our product offerings, we are expanding our geographical footprint and creating robust new revenue streams," he adds.

Between Dec 9 and 10, LMS Compliance&rsquo s : LMS 0% executive director and CEO, Ooi Shu Geok, and executive director and chief development officer, Chong Moi Me, increased their total interest in the Catalist-listed company from 83.83 per cent to 84.01 per cent. The 185,000 shares were acquired at an average price of S$0.352 per share.

 

On Dec 3, LMS Compliance announced through its subsidiary, My CO2 Group, a collaboration with the Malaysian Semiconductor Industry Association, Masverse Technologies and CRIF Omesti to help Malaysian SMEs achieve environmental, social and governance compliance and promote sustainability awareness.

Catalist-listed LMS Compliance says its subsidiary, My CO2 Group (MyCO2), has entered a collaboration with the Malaysian Semiconductor Industry Association (MSIA), Masverse Technologies (Maschain), and CRIF Omesti (CRIF), according to a Dec 3 release. 

 

The collaboration is expected to assist members of MSIA, mainly small and medium enterprises (SMEs) to achieve environmental, social and governance (ESG) compliance, promote sustainability awareness and strengthen Malaysia&rsquo s position in the global semiconductor supply chain, says the group. 

 

Under the collaboration, MyCO2 is set to lead the execution of the ESG Readiness Self-Assessment & Action Plan Program, utilising its proprietary digital tools to help SMEs identify their gaps in ESG compliance and develop actionable plans through personalised consultations.

 

The program will be implemented in three stages, including receiving free ESG self-assessment tools, free ESG readiness certificates, and subsidised ESG consultation services. 

 

According to the group, the program aims to assist at least 50 MSIA member companies in boosting their ESG performance and aligning with international sustainability standards.

 

Louis Ooi, executive director and CEO of LMS Compliance, commented, &ldquo Our partnership with MSIA, Maschain and CRIF underscores our commitment to empowering SMEs in the semiconductor industry with the tools and resources necessary for ESG compliance. Through this initiative, MyCO2 aims to support these businesses in achieving sustainability benchmarks, enhancing their global competitiveness and fostering long-term environmental stewardship.&rdquo

Between Oct 9 and 10, executive director and CEO Ooi Shu Geok and executive director and chief development officer Chong Moi Me increased their deemed interests, with 170,000 shares acquired at an average price of S$0.365 per share.

 

This increased the aggregate deemed interest of Dr Ooi and Chong in the Catalist-listed company from 83.67 per cent to 83.83 per cent. Both are deemed interested in all the shares of the company held by Louis May and Fitcorp Value.

 

Based in Malaysia, LMS Compliance : LMS 0% has more than 15 years of experience in laboratory testing and certification services.

 

These include testing and assessment, certification, trading and distribution of conformity assessment technology.

 

The company operates three accredited laboratories and offers a range of services such as chemical and microbiology analyses, ISO certification audits, and the distribution of analytical instruments and testing equipment.

 

Recently, LMS Compliance launched an assurance, validation and verification segment to provide environmental, social and governance data collection and reporting services.

 

For its H1 FY24 (ended Jun 30), LMS Compliance reported an increase in net profit of 3.8 per cent from H1 FY23 to RM2.74 million (S$833,987). Excluding the impact of its listing expenses in FY22, LMS Compliance has steadily and consistently grown its net profit from FY19.

 

Dr Ooi noted in August that the group achieved double-digit revenue growth in H1 FY24, driven by strong demand for the laboratory testing services.

 

He added that the group will focus on optimising costs, strengthening customer relationships, and leveraging digitalisation and technology to streamline processes and enhance operational efficiency.

On Sep 24, Louis May acquired 170,000 shares of LMS Compliance : LMS -5.56% at an average price of S$0.356 apiece. This increased the aggregate deemed interest of executive director and CEO Dr Ooi Shu Geok, and executive director and chief development officer Chong Moi Me from 83.51 per cent to 83.7 per cent. Both Dr Ooi and Chong are deemed interested in the Catalist-listed company through shares held by Louis May and Fitcorp Value.

 

For its H1 FY2024 (ended Jun 30), LMS Compliance reported that its revenue rose to RM12.24 million (S$3.8 million), a 23.4 per cent increase from the figure in H1 FY2023. This growth was primarily driven by a RM1.96 million rise in sales from the group&rsquo s laboratory testing services segment, fuelled by strong demand from customers in the food, medical devices, and fertiliser industries.

 

This segment remains the group&rsquo s main revenue contributor, making up about 93.9 per cent of total revenue in H1 FY2024 &ndash slightly down from 96.1 per cent in H1 FY2023 &ndash due to higher revenue from the group&rsquo s certification services and trading business segments.

 

In H1 FY2024, the company&rsquo s material costs rose by 62.7 per cent to RM1.24 million. Employee benefit expenses increased by 25.6 per cent to RM4.72 million, while other expenses grew by 21.5 per cent, driven by higher purchases, outsourcing, manpower costs, and professional fees.

 

Despite the rise in expenses, the group&rsquo s profit before tax increased to RM4.01 million in H1 FY2024, an 8.2 per cent increase from the same period in the preceding financial year. Even with a higher effective tax rate, profit after tax grew 3.8 per cent to RM2.74 million, compared with RM2.64 million in H1 FY2023.

 

Dr Ooi noted that the group will continue to focus on optimising its cost pressures, as well as nurturing and strengthening its relationships with customers, while harnessing digitalisation and technology to further streamline its work processes and improve operational efficiencies.

 

Between July 2 and July 3, Louis May Pte Ltd acquired 261,000 shares of LMS Compliance : LMS 0% at an average price of S$0.36 per share. This increased the aggregate deemed interest of executive director and CEO, Dr Ooi Shu Geok, and executive director and chief development officer, Chong Moi Me, from 83.21 per cent to 83.50 per cent.

 

Both Dr Ooi and Chong are deemed interested in the Catalist-listed company shares held by Louis May and Fitcorp Value.

Between Jun 13 and 14, Fitcorp Value acquired a total of 191,800 shares at an average price of S$0.345 per share.

 

This increased the aggregate deemed interest of executive director and CEO, Ooi Shu Geok, and executive director and chief development officer, Chong Moi Me, in the Catalist-listed company from 82.99 per cent to 83.21 per cent.

 

Both Dr Ooi and Chong are deemed interested in all the shares of the company held by Louis May and Fitcorp Value.

 

LMS Compliance : LMS 0% specialises in laboratory testing, certification, and assurance services, with a presence in Malaysia and Singapore.

 

For over 15 years, the company has offered a range of services, including testing and assessment, certification, trading, the distribution of conformity assessment technology, as well as assurance, validation, and verification.

 

Dr Ooi primarily oversees the business development activities and operations and leads the strategic direction of the group. As chief development officer, Chong is responsible for the growth of the group&rsquo s business, developing business strategies and exploring opportunities.

 

For its FY23 (ended Dec 31), LMS Compliance reported an 11.9 per cent increase in revenue, amounting to RM20.9 million (S$6.01 million). This growth was primarily driven by the laboratory testing services, which saw a revenue boost from RM17.9 million in FY22 to RM20 million in FY23.

 

The earnings per share also more than doubled from FY22, to 6.27 sen. The positive operating cash flow of RM6.1 million and net cash position of RM14.5 million, as at Dec 31, position the group favourably for future expansion and capitalising on new opportunities.

 

On May 30, the group announced that it had formed a collaboration with Hashstacs (Stacs), a company specialising in environmental, social and governance (ESG) data and technology. This collaboration aims to explore the integration of ESG-related data within Stacs&rsquo ESGpedia platform, potentially enhancing the accessibility and management of ESG metrics.

 

Dr Ooi maintained in April that the management team continues to identify and assess potential growth opportunities, including synergistic acquisitions and collaborations in China, Singapore, and Indonesia.

 

The group also noted in 2023 that LMS Compliance had about 80 per cent of its revenue from repeat customers in the testing and assessment segment and it is not dependent on any single client or industry for the testing services.

 

As at Jun 20, the LMS Compliance stock has generated a 38.1 per cent total return from its initial offer price, and Dec 1, 2022, debut. The stock also maintains a return on equity ratio of 19.1 per cent, trailing dividend yield of 3.8 per cent, and price-to-earnings ratio of 19.2 times.

 

While the stock ranks outside the 300 most-traded stocks listed in Singapore this year, its average daily trading turnover has increased by more than 40 per cent from 2023 levels.

 

INSTITUTIONS were net sellers of Singapore stocks over the four trading sessions to Jun 20, with S$152.1 million of net institutional outflow, as 22 primary-listed companies conducted buybacks with a total consideration of S$46.3 million.

 

OCBC : O39 -0.21% led the buyback consideration tally for the abbreviated four-session week, acquiring 1.125 million shares at an average price of S$14.21 per share.

 

Its share buyback programme is a part of its strategic capital management, where purchased shares are held as treasury shares.

 

These shares are accounted for as a reduction in share capital and can be used for various purposes, including cancellation, sale, or fulfilling commitments under employee share schemes.

 

In its 2023 financial year (ended Dec 31), OCBC bought 16.4 million shares at a cost of S$205 million and used 15.6 million treasury shares to satisfy employee share scheme obligations.

 

Among the contingent of primary-listed companies not on the Straits Times Index (STI) that conducted buybacks over the four sessions, iFAST Corp : AIY -0.54% led the consideration tally with 109,100 shares acquired at an average price of S$7.30 per share.

 

iFAST maintains that its buybacks are one method through which the return on equity of the group may be enhanced. It adds that the programme can serve as a mechanism to facilitate the return of surplus cash over and above its ordinary capital requirements in an expedient and cost-efficient manner.

 

Digital Core Reit (real estate investment trust) Management also acquired 2,164,400 units of Digital Core Reit : DCRU +3.48% over the four sessions.

 

Leading the net institutional outflow over the four sessions were DBS : D05 -0.06%, Seatrium : 5E2 -1.94%, Yangzijiang Shipbuilding : SO7 0%, OCBC, CapitaLand Ascendas Reit : A17U -0.39%, Keppel : BN4 +0.31%, Singapore Airlines : C6L -0.15%, CapitaLand Integrated Commercial Trust : C38U +0.52%, Singapore Exchange : S68 -0.11%, and Thai Beverage : Y92 +1.08%.

 

Meanwhile Singtel : Z74 +0.38%, Jardine Cycle & Carriage : C07 +0.55%, Mapletree Logistics Trust : M44U -1.52%, Great Eastern : G07 +0.04%, Sembcorp Industries : U96 +1.41%, Golden Agri-Resources : E5H 0%, CapitaLand Investment : 9CI +0.75%, Sats : S58 0%, Yoma Strategic Holdings : Z59 +1.77% and Suntec Reit : T82U 0% led the net institutional inflow.

 

The four trading sessions saw more than 80 director interests and substantial shareholdings filed for close to 30 primary-listed stocks.

 

Directors or chief executive officers filed 14 acquisitions, and one disposal, while substantial shareholders filed three acquisitions and two disposals.