KUALA LUMPUR (Nov 25): Scicom (MSC) Bhd chief executive officer Datuk Seri Leo Ariyanayakam is expecting the group to do better in its current financial year ending June 30, 2020 (FY20) due to new projects secured.

He said the group secured between five and ten projects during FY19, which is expected to be reflected in the performance of FY20.

Leo explained that last year's performance was challenging with its three main business areas not doing well, mainly due to fewer higher-valued contracts secured.

For FY19, the group's net profit fell 37% year-on-year (y-o-y) to RM20.21 million from RM32.22 million, as revenue slipped 2.5% y-o-y to RM161.16 million.

"Some of our Chinese clients were affected by the trade war, which had a slight impact on us too. But we are expecting to do better this year," he told reporters after the group's annual general meeting here earlier.

The group's better performance is also important so that it can continue paying a generous dividend, which it has been doing for the past several years, Leo added.

According to Scicom's latest 2019 annual report, the group has no formal dividend policy in place though on average, it has declared a pay-out of approximately 83% of its net profit over the last five years.

The projects secured are all in the business process outsourcing (BPO) division, which is what the group specialises in. The segment consists of three business areas: customer lifecycle management, e-government solutions and e-commerce solutions.

Leo declined to state the value to these new projects but did say the sectors include aviation, e-commerce, telecommunications and hospitality, and are based around Asia.

The group is also targeting to secure a contract to track foreign workers. In a previous interview with The Edge Weekly, Leo said the contract will be awarded by a source country that exports thousands of workers to 12 countries, including Malaysia.

"Yes, it's looking very positive. We do hope to secure it in this financial year. It has not been computed into our numbers so we do believe we will grow irrespectively. Securing this project will be a good bonus," he added.

On new markets, Leo noted that last year, the group set up a business in Mauritius, which he says will provide a gateway into the African market.

At the midday break, Scicom shares settled three sen or 2.88% lower at RM1.01, with 1.15 million shares done.