KUALA LUMPUR: SMR Technologies Bhd (SMR Tech), which has a market capitalisation of RM12.46 million, bagged a big contract yesterday as its wholly owned subsidiary SMR HR Group Sdn Bhd (SMR HR) was awarded an RM89.5 million job by the Ministry of Education (MOE).

The contract, which lasts for three years, requires SMR HR to recruit and manage English language teaching consultants, and to also implement In-Service Teachers Training for English Language Teachers (ELT) in primary schools under the MOE, said SMR Tech in an announcement to Bursa Malaysia yesterday.

The training would be managed through the company’s owned technology platform. However, SMR Tech said the MOE does not guarantee in any way that the ELT consultant services would be taken in full.

“All appointments of ELT consultants have to be in accordance with the demand from the government’s ‘constitutes an order’. Payment from MOE will be made according to the number of ELT consultants appointed as agreed upon by MOE and SMR HR,” it said.

The award constitutes the recruitment and management of up to 120 ELT consultations to implement the in-service teachers training until Sept 30, 2012. As part of the contract terms, SMR Tech was also required to deposit a performance guarantee in the form of an irrevocable financial guarantee by an approved financial institution or insurance company in Malaysia for a sum of RM4.475 million, which represent 5% of the annual contract sum.

SMR Tech, which provides solutions in human resources development, said the contract from MOE is expected to contribute positively to its earnings. The sizeable award could boost the company’s performance as it has been making losses in the past two financial years.

For the financial year ended Dec 31, 2008, SMR Tech posted a net loss of RM7.3 million on the back of RM11.36 million in revenue. According to its annual report, the loss was due mainly to declining sales of in-house products which did not perform due to weak market sentiments, higher operating expenses and full amortisation cost being taken up for obsolete products.

The following financial year, it managed to narrow its losses to RM2.1 million on the back of RM7.55 million in revenue due to cost cutting measures.

It managed to return to the black in the second quarter ended June 30, 2010, when it posted RM7,000 profit on the back of RM2.533 million revenue.

Despite that, SMR Tech has seen little liquidity in the market. The counter has only increased 1.5 sen year-to-date to close at 8.5 sen yesterday.


This article appeared in The Edge Financial Daily, September 23, 2010.