A solid quarterly performance and an expanded full-year footprint underscore MGB Bhd’s sustained momentum, as the construction group posted a notable rise in fourth-quarter profit driven by a surge in other income, even as revenue declined due to project completions. The company also announced an interim dividend and outlined a moreShareholder-friendly payout policy, while highlighting robust demand from its affordable housing-focused development strategy and continued prospects from government projects. For the full year, MGB registered a healthy uplift in net profit and revenue, with the property development segment delivering the standout growth that propelled the group’s earnings higher. As the management team points to a solid order book and sizeable unbilled sales, investors are left weighing the impact of a reshaped dividend framework against a backdrop of a competitive construction market and a pipeline of public sector initiatives.
4QFY2024 performance highlights
MGB Bhd reported a stronger bottom line for the fourth quarter ended December 31, 2024 (4QFY2024), with net profit climbing to RM14.44 million, up 21.76% from RM11.86 million a year earlier. The quarterly improvement reflects a significant uplift in other income, which contributed a substantial RM6.62 million in 4QFY2024, compared to RM181,000 in the prior-year period. This surge in other income, representing a remarkable year-on-year increase of about 3,557%, was a key driver behind the quarterly earnings gain and helped offset a slower revenue base for the period. Earnings per share (EPS) rose to 2.44 sen in 4QFY2024 from 2.0 sen in 4QFY2023, signaling a meaningful improvement in profitability per share even as top-line activity cooled.
Turning to revenue, MGB’s 4QFY2024 turnover dipped to RM256.84 million, marking a 15.88% decline from RM305.33 million recorded in the same quarter a year earlier. The revenue contraction is attributed primarily to the completion of a number of ongoing projects in the preceding quarter, which naturally tempered quarterly sales volume. Despite this revenue headwind, the company managed to sustain profitability through the benefit of stronger non-operating income streams and prudent cost management, underscoring the resilience of its earnings mix in an environment characterized by project milestones and lifecycle dynamics.
In line with the quarterly results, MGB declared its first interim dividend for the period—a single-tier dividend amounting to 1.52 sen per share. The dividend is payable on March 28, providing shareholders with a tangible return on the company’s 4Q performance as it navigates the near-term revenue cycle while continuing to pursue project execution efficiency and value creation across its development portfolio. The announcement of the interim payout also reflects management’s ongoing commitment to delivering shareholder value in tandem with sustaining working capital and project cash flows in a capital-intensive sector.
Full-year FY2024 results and segment performance
For the full year of FY2024, MGB posted a notable upturn in profitability, achieving a net profit of RM60.11 million, representing an increase of 24.78% from RM48.17 million in FY2023. Revenue for FY2024 totaled RM1.03 billion, a year-on-year rise of 6.19% from RM971.83 million previously, reflecting a positive trajectory across the group’s operations alongside disciplined execution and project management. The comprehensive improvement in earnings and revenue underscores the company’s capacity to scale its activities while balancing cost controls and strategic project selection in a year characterized by both progress and completion phases within its project portfolio.
A standout contributor to the full-year performance was the group’s property development segment, which reported a fourfold increase in revenue to RM483.6 million in FY2024 from RM115.6 million in FY2023. This surge in revenue within the property development arm translates into a substantial uplift in profitability as well, with the segment posting profit before tax (PBT) of RM76.6 million in FY2024, compared with RM18.6 million in FY2023. The dramatic expansion in segment profitability reflects the accelerated progress and ramp-up of several development projects within the portfolio, signaling the group’s success in unlocking value from its real estate initiatives and leveraging its development capabilities to drive earnings growth.
MGB attributes much of the FY2024 improvement to the accelerated progress on its development projects, which include Idaman Melur, Idaman Cahaya’s Phase 1 and Phase 2, Idaman Sari, and Saujana Indah’s Phase 1 and Phase 2. These projects collectively illustrate the group’s strategic pivot toward high-demand, affordable housing solutions, as well as its capacity to execute large-scale development programs efficiently. The performance of these initiatives underpins the overall better financial results for the year, reinforcing the company’s strategy to align its core strengths in design, build, and project delivery with growing demand for affordable housing.
Group executive chairman Tan Sri Lim Hock San commented on the year’s performance, emphasizing that the significant growth in the property development segment highlights MGB’s strategic shift toward affordable housing projects and state government initiatives, including Rumah Selangorku 3.0. Lim stressed that the group’s core priority remains the efficient execution of all projects, ensuring timely delivery and optimal resource utilization. He framed this as part of a broader mission to push the boundaries of quality, reliability, and innovation in construction and development. He added that the company remains committed to developing affordable housing solutions and staying close to its vision of being a recognized design-and-build expert capable of setting new standards in the industry.
In line with the improved earnings trajectory, MGB revised its dividend policy to reflect a higher payout ratio. The board raised the minimum dividend payout from 20% to 30% of profit after tax and minority interests (PATMI), with the change taking effect from FY2024. This adjustment signals a stronger emphasis on returning capital to shareholders while maintaining the financial flexibility needed to fund ongoing and future projects. The policy revision aligns with the company’s broader objective of balancing growth investments with shareholder value creation as it leverages its robust order book and development pipeline.
Prospects for the near to medium term appear favorable, according to the group, thanks to a resilient construction segment supported by a substantial order book of approximately RM1.10 billion. Additionally, unbilled sales from ongoing property development projects stand at around RM0.64 billion, providing a forward-looking basis for earnings visibility and revenue recognition across the coming periods. MGB also indicated that it remains open to securing new government projects, which could further expand its scale and diversify its revenue sources, potentially enhancing its portfolio mix and long-term growth trajectory.
Management strategy and strategic positioning
A central theme in MGB’s ongoing narrative is its strategic pivot toward affordable housing and government-aligned housing initiatives, a move aimed at capitalizing on structural demand in the domestic market. Lim Hock San’s remarks illuminate the group’s confidence in this orientation, highlighting the importance of executing development programs efficiently and delivering quality, reliable, and innovative housing solutions. This strategic stance aligns with public-sector housing initiatives and shifts in policy that favor faster and more cost-effective construction methods—a combination designed to sustain growth while addressing housing needs.
The leadership’s emphasis on timely project delivery and optimal resource utilization reflects a broader commitment to operational excellence. By prioritizing execution discipline, MGB aims to maximize project throughput, reduce cycle times, and improve cash conversion across its portfolio. This approach is critical in a market where project milestones, financing arrangements, and regulatory approvals influence revenue recognition and profitability. The company’s declaration of a higher dividend payout ratio also signals confidence in its ability to generate durable cash flows from its core businesses, even as it pursues ongoing investments in development assets and new project opportunities.
In addition to its internal capabilities, MGB’s emphasis on the affordable housing segment positions it to benefit from public housing schemes and alignment with state government priorities. The strategy involves leveraging its design and build proficiency to deliver high-quality housing solutions that meet affordability and regulatory standards while sustaining margins through scale and efficient project management. The leadership’s statements convey a forward-looking vision of establishing MGB as a benchmark in design-and-build excellence, with a continued focus on blending creativity, reliability, and cost-conscious construction practices.
Dividend policy and capital allocation
The group’s updated dividend policy marks a notable shift in capital allocation strategy. By increasing the minimum payout to 30% of PATMI, MGB commits to returning a larger portion of profits to shareholders while maintaining strategic reserves to finance ongoing development activities and potential new contracts. This move is designed to provide clearer visibility of income streams to investors and to strengthen shareholder confidence in the company’s ability to sustain distributions alongside growth investments. It reflects management’s view that the company can balance reinvestment in growth with meaningful returns to shareholders, a balance that may become more pronounced as the group’s property development pipeline comes online and as government-related projects contribute to revenue streams.
The dividend policy change is effective from FY2024, signaling management’s intention to align payout practices with the enhanced profitability profile and cash generation capabilities demonstrated during the year. Shareholders can expect the policy to support a steady income stream, provided that earnings and cash flows remain robust and the company maintains prudent capital management. As MGB continues to execute its development program and pursue new government opportunities, this policy provides a framework for sustaining dividends while preserving capital for growth.
Prospects, order book, and market expectations
Looking ahead, MGB’s prospects appear anchored by a solid foundation in both construction and property development. The group reported an order book of approximately RM1.10 billion, which provides a visible pipeline of revenue opportunities and a degree of revenue recognition confidence across the upcoming projects. Coupled with unbilled sales of about RM0.64 billion from ongoing property development projects, the company possesses a credible forward earnings trajectory that could support growth beyond the current fiscal year. The combination of a sizeable order book and substantial unbilled sales indicates that MGB is well-positioned to continue delivering profits as it progresses through its development programs and secures new contracts, including potential government projects.
The management’s outlook incorporates an expectation that these strong project backlogs will underpin next-year earnings trajectories, contributing to ongoing revenue recognition and improved profitability. The group’s emphasis on affordable housing initiatives and government-led schemes suggests a steady demand environment, with public projects often offering longer contract durations and more predictable cash flows. While the market remains competitive, MGB’s strategic focus on efficiency, timely delivery, and resource optimization aims to sustain competitive margins and operational resilience across its project portfolio.
Market observers noted that MGB’s stock performance may respond positively to the enhanced dividend framework and the company’s growing visibility through its robust property development segment. The market’s assessment of the stock will likely hinge on its ability to maintain project execution discipline, expand its order book through public-sector opportunities, and continue translating development activity into recurring earnings as projects move through construction and handover phases. As investors evaluate risk-reward dynamics in the construction space, MGB’s combination of a strengthened dividend policy, a productive development pipeline, and a diversified revenue base may be viewed as favorable indicators of long-term value creation.
Market reaction and current positioning
Trading activity around MGB shares reflected a cautious yet constructive sentiment, with the stock closing at 69.5 sen, reflecting a marginal decline of half a sen or about 0.71% on the trading day. The market capitalization, anchored by this share price, stood at approximately RM411 million, signaling that the company remains a mid-cap player with meaningful scale in the construction and property development sectors. The stock’s reaction to the quarterly and annual results will likely be shaped by investors’ interpretations of the company’s growth prospects, its ability to sustain higher dividend payouts, and the durability of its earnings contributions from the property development segment in the face of ongoing project completions.
As the year unfolds, investors will monitor how effectively MGB translates the property development pipeline into realized revenue and profit, while maintaining discipline in capital allocation and project execution. The group’s emphasis on affordable housing aligns with public policy directions, which could create a favorable operating environment for its development projects. At the same time, the potential to secure additional government projects could broaden the company’s revenue base and enhance visibility, contributing to a more robust growth narrative that could support shareholder value over the medium to long term.
Conclusion
MGB Bhd delivered a compelling 4QFY2024 performance marked by a strong rise in net profit driven by a sharp leap in other income, even as revenue declined due to project completions. For the full year, the group posted solid gains in net profit and revenue, with the property development segment leading the way through a fourfold jump in revenue and a substantial increase in pre-tax earnings, underpinned by a slate of key development projects. Management underscored a strategic pivot toward affordable housing and state-led initiatives, coupled with a commitment to high-quality, timely delivery and resource optimization. The dividend policy shift to a 30% minimum payout signals greater capital return to shareholders while preserving financial flexibility for growth and development activities. With a robust order book and meaningful unbilled sales, MGB appears well-positioned to sustain earnings momentum and pursue new government opportunities, even as it navigates a competitive market and a cyclical construction industry.
Overall, the results highlight a balance between growth-driven property development and disciplined construction execution, reinforcing MGB’s positioning as a design-and-build specialist focused on affordable housing as a core growth engine. The combination of a strengthened dividend framework, strategic project execution, and an expanding development pipeline could contribute to a steadier earnings profile and a more attractive cash-flow outlook in the periods ahead, supporting ongoing investor interest as the company moves through this chapter of expansion and refinement of its business mix.
