DECLOUT: Shareholder buys 23 million shares in 3 weeks

Declout Limited is loss-making but that has not deterred a substantial shareholder from making big purchases of its shares.

On 4 Feb this year, Wong Poh Leng bought 19 million shares at 22.54 cents apiece in a married deal. That amounted to $4,282,540.

Just a little earlier, on Jan 14, he bought 4 million shares for $920,000 (or 23 cents apiece) in the open market.

These are his first two purchases since the company's IPO in Oct 2012.

He now owns 71,060,000 shares, which is more than double the 32,040,000 shares he held just prior to the IPO.

Aside from the two share purchases this year, the rest of the increase in his holding came from his subscription of his shares entitlement in a rights issue in Sept 2013.

His stake currently amounts to a 16.3% stake in the information and communications technology (ICT) solutions and services provider.

Who is Wong Poh Leng? There is no mention of his background in the IPO prospectus but we understand that he is not related to either Vesmond Wong, the chairman and CEO of DeClout, or any member of the DeClout management team.

Declout_chart2.15 Declout has not paid any dividend since its IPO in Oct 2012 but has instead raised funds from shareholders through a rights issue in Sept 2013.
Chart: www.FT.com
It is not very clear what DeClout's prospects are as there is no analyst coverage. A positive though is the company's stated plan to list a subsidiary, Procurri, next year.

It's also notable that boutique fund, Aegis Portfolio Managers, owns 19,215,000 million shares.

It was a substantial shareholder until Jan this year when its holding of 5.6% was diluted to 4.7% as a result of the issue of new shares by DeClout as part of a M&A transaction.

Financial results:

» 1H2014 revenue net loss after tax was S$2.1 million on S$45.6 million (+65% y-o-y) in revenue. Singapore remained the Group’s largest revenue contributor of $23.9 million, comprising 52% of 1H 2014’s overall revenue, followed by the US and UK, accounting for 34% and 11% of overall revenue, respectively.

» FY2013 net profit was S$1.9 million (+300% y-o-y) on $72.9 million revenue (+37% y-o-y).

For more info, see the company's Powerpoint presentation materials.

Recent story: DECLOUT: Eyes Listing For IT Asset Recovery And Maintenance Arm By 2016

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Counter Name

Last

Change

AEM Holdings

1.880

-0.030

Best World

2.480

-0.010

Boustead Singapore

0.955

0.005