Chairman’s Statement

"Improving Scicom's ability to drive continuous growth requires rethinking its business strategy, organisation, capabilities, and culture. The Board's role is to shape the strategy, set performance targets monitor risks and ensure that the Senior Management Team invests to build capabilities that is aligned with the growth strategy."

Improving Scicom’s ability to drive continuous growth requires rethinking its business strategy, organisation, capabilities, and culture. The Board’s role is to shape the strategy, set performance targets, monitor risks and ensure that the Senior Management Team invests to build capabilities that is aligned with the growth strategy.

Krishnan Menon
Chairman

Dear Shareholders,

Scicom delivered record revenues and net profits for the financial year ended 30 June 2016. Revenue increased by 11.00% to RM196.29 million, and net profit increased by 21.76% to RM41.60 million, as compared to the previous financial year. The exceptional financial performance validates our strategy to focus on key clients and services and our decision to expand into the digital government services market.

Scicom has been a trusted partner for innovating the customer experience and service delivery platforms for Fortune 500 companies for almost two decades. Three years ago, we started working with government clients to architect and deliver digital government transformation projects to better serve and enable all relevant stakeholders with efficient and cost effective solutions.

Governments in emerging countries are in the early days of their digital government journey and are now focused on building technology platforms in order to deliver convenient services to citizens and businesses. We believe federal, state and local governments will be an attractive market for digital technologies as governments move to offer digitized services to their citizenry in a world that is being rapidly connected and Omni-channel in nature.

Across the entire digital services value chain, Scicom is creating digital government platforms that provide consistent long term revenue streams amidst a challenging global economic environment.

During the financial year, the Group also executed on its plan to grow its digital government business to emerging countries. Scicom set up a wholly owned subsidiary, Scicom E Solutions Sdn Bhd, on the 30th December 2015 to focus on growing our digital government services revenue and are in the process of applying for MSC status for the company to leverage on the incentives offered by the Malaysian government in this rapidly growing field. On the 8th April 2016, Scicom set up a wholly owned subsidiary, Scicom (Cambodia) Co., Ltd. in the Kingdom of Cambodia to tap into emerging markets in Indochina.

 

IMPROVING RETURNS FOR OUR SHAREHOLDERS

FY2016 has been another year of excellent returns for shareholders. The Board declared a total dividend of 9.0 sen per ordinary share that is tax exempt for the financial year ended 30 June 2016. Total dividends declared amounted to 76.27% of total net profit attributable to the owners of the Group which reflects the Board’s continuing commitment towards maintaining a consistent dividend payout ratio for its shareholders.

Taking into account dividends and share issuances, the Group delivered a compounded growth rate of 969.12%, since the IPO in 2005 (assuming all dividends are reinvested at spot prices). We completed FY 2016 with RM37.00 million in cash and a zero debt position. A strong balance sheet and solid cash flows will continue to provide us with the operating flexibility to fund organic growth and explore new business initiatives.

 

GOVERNANCE AND THE BOARD

Improving Scicom’s ability to drive continuous growth requires rethinking its business strategy, organisation, capabilities, and culture. The Board’s role is to shape the strategy, set performance targets, monitor risks and ensure that the Senior Management Team invests to build capabilities that is aligned with the growth strategy.

The Board consists of 7 members, who collectively have the knowledge and experience to drive the Group’s growth agenda and to monitor the business and financial risks. Scicom’s Board of Directors are leaders in their respective fields—IT, Finance, Consulting, Legal, and Corporate Governance.

 

OUTLOOK AND FUTURE PROSPECTS

Scicom will continue to pursue new and better ways to serve its clients. The Group strives to anticipate our client’s future needs and prioritises investments that builds capabilities that will enable us to be competitive in the Customer Lifecycle Management, Education and Digital Government Services marketplace.

 

Customer Lifecycle Management

The focus will be on improving Scicom’s dominant position in the ASEAN region and to grow the domestic market in Sri Lanka. Riding on our success over the years, Scicom will continue to provide a distinctive experience for our client’s customers, seeing the world through their customer’s eyes to improve customer experience and satisfaction. Creating value through transforming customer journeys will drive top line growth for our clients and enable Scicom to lead the marketplace for multi-lingual and multi-channel services in the Asia Pacific region.

 

Education

Scicom’s Education business unit provides both corporates and governments with vocational training in the Services Management sector. In FY2017, the focus will be on designing a learning solution that will close the critical skills gap that employers face in the services industry. Scicom Academy creates tailored learning programmes for clients that have a variety of approaches, from hands-on experience in simulated environments to online professional development and one on-one coaching. We plan to pilot additional experiential learning programmes that are designed for an organisation’s unique requirements. This enables participants to practice and refi ne new skills and to positively impact organisational performance.

 

Digital Government Services

Scicom has been at the forefront of designing customer centric processes and shaping successful customer journeys. We are now taking that to the public sector to make government services, citizen and business centric, addressing the whole experience from start to finish, making the process clear, simple, and logical. There is sizeable business opportunity for Scicom to implement citizen centric solutions for delivering government services and to accelerate the digital government journey for clients. Our focus here is to build highly scalable digital government platforms and solutions that will enable governments to use technology to serve citizens and businesses better.

 

Scicom after almost two decades in business has evolved from offering basic call centre services to providing complex solutions to a discerning client base comprising of MNCs, local conglomerates and governments. Our continued diversification enables us the flexibility to offer complex integrated solutions across the entire supply chain to our clients. Today, we have proven capabilities in process re-engineering, software development, online portal development, social media support, application and systems integration, payment gateways, CRM applications, biometric solutions, customer contact management, backend processing and fulfillment, big data and analytics, e-commerce, education solutions and customer facing services. We believe that Scicom is well positioned with a compelling strategy and an implementation capability that will enable it to conduct the businesses of the future, today.

 

APPRECIATION

My heartfelt thanks goes to entire Scicom staff for their commitment and passion to deliver value for our clients and our company. I wish to thank the Government of Malaysia, our shareholders, and our loyal clients for their continued support. As always, I would also like to express my gratitude to my fellow Board members for their dedication and guidance in shaping the Group’s strategic direction. In closing, I would like to congratulate the entire Scicom team for a truly exceptional year.

 

Thank You.