RedHot Media Shares Climb As FY11 Profit Up, Announces First Scrip Dividend

6/20/2012 5:12 AM ET

Shares of RedHot Media International Limited (RHM.L) are currently trading around 16 percent higher on the London Stock Exchange after the Malaysian holding company reported a higher profit for its fiscal year 2011 and also announced its first scrip dividend.

The provider of research and development of electronic applications for trading, trading services and media trading said its fiscal 2011 profit before tax grew 13 percent to 10.4 million Malaysian Ringgit and basic earnings per share increased 10 percent to 28.17 sen per share.

Total revenue for 2011 increased 33 percent to 58.9 million Ringgit.

The company noted that it was focused on expanding its market share in the advertising sector, which made up 97 percent of the total revenue, a growth of 36 percent compared to 2010. The financial services business underwent a restructuring of its business units, causing a decline of 22 percent in revenues.

Gross margin was lower at 32 percent, compared to last year's 40 percent.

"Our performance continued to improve and we increased our market share in Malaysia and China for 2011, despite advertising expenditure forecasts by experts in the region for 2011 marginally missing expectations," the company said.

RedHot Media also said it will issue its first scrip dividend to shareholders this year. The Board has approved and will propose a bonus issue of 1 new ordinary share for every 10 ordinary shares held by each shareholder.

The Board has also approved in principle a quantum equivalent to a further 20 percent of the enlarged share capital to be tabled for shareholders' approval in full or tranches later in the year.

Looking ahead for 2012, RedHot Media said its outlook has shown clear signs of optimism with strong developments in the beginning of the year. The focus continues to remain in improving market share and client retention within the region.

Merger and acquisitions opportunities for new lucrative business avenues which add value to the company still remains on track.

The Board is confident that 2012 will be yet another successful year, it said.

The shares are currently trading at 39 pence, up 5.50 pence or 16.42 percent in London.

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by RTT Staff Writer

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