Pegasus Heights Bhd (PHB) is slowing down its spending to upgrade the group's Centerpoint Seremban shopping mall in Negeri Sembilan, due to the Covid-19 pandemic.
PHB, formerly known as Naim Indah Corp Bhd had raised total gross proceeds of RM53.97 million from a rights issue on June 26, 2019.
It intended to utilise RM23.1 million from the proceeds to promote, upgrade, and maintain the mall within 36 months. As of April 30, 2020, it had utilised RM17.57 million.
Overall, the group had utilised RM37.64 million of the total proceeds from the rights issue as of April 30, 2020, for working capital, repayment of bank borrowings, expansion of its food and beverage business, and the mall.
PHB said in a filing with Bursa Malaysia last week that in light of the current weak market conditions due to Covid-19 outbreak, the group is expected to reduce the costs for promotion, upgrade, and maintenance of Centerpoint Seremban.
It also said that after careful deliberation of the current business operational needs of the group, the board had decided to partially re-allocate the unutilised rights issue proceeds of RM13 million for working capital (RM10.5 million) to support its existing business operations and repayment of bank borrowings (RM2.5 million).
The repayment of borrowings will be utilised within six months from the date of the announcement and is expected to result in interest savings, it said.
For the fiscal year 2019, PHB's revenue increased 39.9 per cent to RM14.24 million as compared to revenue of RM10.18 million in the preceding year.
Net loss reduced by 38.8 per cent to RM13.99 million, from a net loss of RM22.85 million posted in 2018.
PHB recorded higher revenue predominantly due to better contribution from the trading business which increased 21.1 per cent to RM8.3 million coupled with higher contribution from property management which increased 55.5 per cent to RM6.58 million.
The higher contribution from the property management business was achieved as occupancy of Centerpoint Seremban improved 10.1 per cent to 75.4 per cent as at the end of 2019, compared to the end of 2018 which was 65.3 per cent.
PHB said it remains focused on optimising and realising the full value of Centerpoint Seremban Mall.
The performance improvement has centered upon increasing footfall and thus higher occupancy rates and rental yields.
Occupancy rates continue to improve with the mall achieving 81 per cent occupancy at the end of January 2020, it said.
PHB also expects its project management consultant (PMC) division to be one of the growth drivers and to be profitable, following the recent acquisition of ChinPakLoong Architect for RM16 million.
It said the acquisition has a minimum profit guarantee of RM2 million per year for the next two years.