Thursday, May 31, 2007

Symphony sees Strong Revenue Growth!

My dearest Moo Moo Cow,

Remember the Symphony posting I made the other day?( see
Symphony Again )

Today, there is an article on Business Times,
Symphony sees strong revenue growth
  • SYMPHONY House Bhd, which has re-positioned itself as an outsourcing services provider, is confident of seeing double-digit growth in its revenue this year.

    "The shareholders are happy with the new direction of the company to exit the technology business and focus on the outsourcing business which would provide a more visible and stable income," group chief executive Datuk Azman Yahya told a media briefing after the company's AGM in Kuala Lumpur yesterday.

Confident of seeing double-digit REVENUE growth? LOL! It's a revenue growth and not an earnings growth!

Quote: "The shareholders are happy"

I wonder HOW and WHY!!

The following is a 2 year chart of Symphony House. Compare the performance of Symphony House versus the broader market index. How could any shareholders be happy?

  • Azman said with the new focus, the company has decided not to go ahead with its listing plans for its 72 per cent-owned subsidiary VSource Asia Sdn Bhd, which would be the main anchor for its outsourcing business.

Ah, this VSource was another issue!

Back in May 2005, have a look at this announcement, Quarterly rpt on consolidated results for the financial period ended 31/3/2005

  • The Group recorded revenue and profit before taxation ("PBT") for the quarter ended 31 March 2005 of approximately RM32.5 million and RM2.3 million respectively. This is an increase of 104% in revenue and a decrease of 58% in PBT when compared to the same quarter of the last financial year. The drop in PBT for the quarter under review was largely due to lower profit margin for IT billings during the quarter and initial quarter losses incurred by the Company's new subsidiary, Vsource Asia Berhad.

See the problem with VSource was best described by Surf88 ( an investment advisor which unfortunately no longer exist now).

  • By: Surf88
    Date: Friday, December 12, 2003
    Time: 8:20:10 AM

    Symphony House (Symphony) (susp @ RM2.29, stock code 0016) has proposed to acquire 30.3% of Vsource (Malaysia) for RM27.9M cash from its US-based parent company, Vsource Inc. Vsource (Malaysia) is principally involved in business process outsourcing (BPO) services, which covers areas such as claims processing, invoicing, human resources and payroll, finance, procurement and customer support. Vsource Inc also plans to sell another 9% stake in Vsource Malaysia to one or more Malaysian investors.

    Meanwhile, Vsource (Malaysia) is in the midst of acquiring Vsource Inc’s business operations in Japan and Taiwan, which will essentially give Symphony indirect exposure to the two countries. Based on available information, Vsource (Malaysia) has done well with revenue of RM94.4M and pretax profit of RM23.9M in the financial year ended Jan 2003, translating to a healthy margin of 25%. The performance of the to-be-acquired businesses in Japan and Taiwan was not disclosed.

Symphony simply wasn't too transparent in disclosing full details of VSource, yes? For a rm27.9 million purchase, surely as a listed company, you should have disclosed fully.


  • The Proposed Debt Purchase involves the purchase by Symphony the sum owing of USD1,739,000 by Vsource Asia to Vsource, Inc. The sum owing are advances previously made by Vsource, Inc. to Vsource Asia to fund their working capital requirements.

Now the company has performed poorly.

  • Symphony House posted a revenue of RM218.39 million, up 10 per cent from 2005, but saw its net profit decline 88.3 per cent to RM2.12 million for the financial year ended December 31 2006

Can someone please tell me how could the shareholders be happy?