Procurri's 9M profit rose 27% to $5m

Future growth hinges on potential acquisitions.

Procurri's 9M16 net profit (excluding one-offs) of S$5m was up 27% y-o-y.

There was an IPO-related one-off expense of S$2.2m. 9M16 revenue stood at only S$93.8m, up merely 4.3% y-o-y as Procurri faced some project delays in European, Middle Eastern, African and South American markets.

Post IPO, Procurri is bidding for bigger projects (S$5-10m versus S$20-30k earlier) which is taking more paper work and processing time. In addition, Procurri is focusing more on Lifecycle services which command higher margins.

Moving forward, DBS Vickers Securities believe that potential acquisitions will aid growth.

Procurri is looking to group its higher-margin Lifecycle services business in US and Europe. The company has acquired EAF Group in UK to support its Europe business.

"Management is quite keen to acquire more companies to grow its global footprint. Procurri wants to acquire a profitable company which is finding it difficult to grow due to the lack of global footprint," it said.

The research house projects a potential acquisition to contribute over S$3m in earnings in FY17F.

"Typically, such companies can be acquired at cheap valuations and Procurri can use its global footprint to drive their growth. Procurri has demonstrated ability in identifying appropriate targets and partners with whom it can develop synergistic relationships and execute development and integration," it explained.