LMS Compliance Ltd. FY2025 Financial Results: Analysis & Insights
LMS Compliance Ltd., listed on the Catalist board of the Singapore Exchange, released its unaudited condensed interim financial statements for the six months and full year ended 31 December 2025. The company saw notable growth in revenue and profit, driven by its laboratory testing, certification, and consultancy services. Below, we analyze key financial metrics, performance trends, dividend proposals, and strategic developments, providing actionable insights for investors.
Key Financial Metrics: YoY & QoQ Comparisons
| Metric |
2H 2025 |
1H 2025 |
2H 2024 |
YoY Change (2H) |
QoQ Change (2H vs 1H 2025) |
| Revenue (RM’000) |
20,689 |
12,946 |
13,146 |
+57.4% |
+59.8% |
| Profit After Tax (RM’000) |
3,992 |
2,769 |
2,469 |
+61.7% |
+44.2% |
| EPS (RM cents) |
2.80 |
2.09 |
1.96 |
+42.9% |
+34.0% |
| Dividend (S\$ cents, Final) |
1.00 |
N/A |
1.10 |
-9.1% |
N/A |
Historical Performance Trends
- Revenue: Full-year revenue increased by RM8.25 million (+32.5%) to RM33.64 million, driven by certification and consultancy services (up RM6.61 million), laboratory testing services (up RM1.80 million), and training and assurance (up RM0.13 million).
- Profit: Net profit after tax rose by RM1.55 million (+29.8%) to RM6.76 million, reflecting strong top-line growth and effective cost management.
- EPS: EPS improved from 4.08 RM cents to 4.89 RM cents YoY.
- Working Capital: Positive working capital increased from RM23.84 million to RM25.04 million.
- Cash and Cash Equivalents: Increased by RM2.34 million to RM14.60 million, accounting for 43.9% of total current assets.
Exceptional Earnings/Expenses & Business Actions
- Business Combination: Acquisition of Anchor Technology Holdings Co., Limited (ACC) contributed to the growth in certification and consultancy services. The acquisition added intangible assets of RM14.93 million, including goodwill of RM13.44 million.
- Provision for Loss Allowance: The company recorded a net provision of RM0.11 million in FY2025, reversing a net reversal in FY2024 due to changes in estimated credit loss rates.
- Depreciation & Amortization: Increased due to acquisition-related asset additions and amortization of intangible assets.
- Other Income: Saw a positive impact from government grants, management fees, and gains on bargain purchases.
Dividends
- Proposed Final Dividend: 1.00 S\$ cent per share (tax exempt, one-tier), subject to shareholder approval at the AGM in April 2026.
- Previous Year Dividend: 1.10 S\$ cent per share (tax exempt, one-tier).
Corporate Actions
- Share Issuance: 9,456,340 shares issued for ACC acquisition; 22,875,667 bonus shares allotted in November 2025.
- Subsidiary Incorporation: MY CO2 Inspection Sdn Bhd incorporated in October 2025, broadening compliance-related business offerings.
Related Party Transactions & Unusual Fund Flows
- Related-party payments included expenses and rental fees paid to directors, and management fees from subsidiaries.
- No significant Interested Person Transactions (IPTs) above S\$100,000.
Events & Outlook
- Regulatory Environment: The company expects increasing regulatory requirements and enforcement in safety and environmental standards to drive demand for third-party inspection and certification services.
- Strategic Expansion: ACC acquisition and MISB incorporation enhance capabilities in certification, inspection, and compliance, positioning the company to capitalize on growing demand.
- No adverse opinions or outstanding audit issues reported.
- Macroeconomic Factors: No direct mention of natural disasters, legal disputes, or other material events affecting the business.
Chairman’s Statement
No explicit Chairman’s Statement was provided in the report. However, the tone throughout the management review is positive, emphasizing revenue growth, strategic acquisitions, and enhanced service offerings, while noting the expectation for continued strong demand due to regulatory tailwinds.
Conclusion & Recommendations
Overall Assessment: LMS Compliance Ltd. delivered strong financial performance in FY2025 with significant revenue and profit growth. The acquisition of ACC and strategic expansion into vehicle and goods inspection services position the company for continued growth. Cash generation remains robust, and the company maintains a healthy balance sheet. The modest decrease in the proposed final dividend reflects prudent capital management amid expansion.
Recommendation for Current Holders: Investors holding LMS Compliance Ltd. shares may consider maintaining their position. The company’s steady growth, strategic acquisitions, and positive cash flow indicate resilience and potential for further upside, particularly as regulatory demand increases.
Recommendation for Potential Investors: Those not currently holding may consider initiating a position. The company’s expansion and sector tailwinds present compelling prospects, although monitoring execution risks around new subsidiaries and acquisitions is advised.
Disclaimer: This analysis is based solely on the company’s unaudited financial report and does not constitute investment advice. Investors should conduct their own due diligence and consider their risk tolerance before making any investment decisions.
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