PETALING JAYA: Scicom (MSC) Bhd expects the full-year contribution from projects secured during FY2026 to provide a key growth driver in FY2027, as the group seeks to build a more recurring and scalable earnings base through long-duration digital platforms.
Group CEO Datuk Seri Leo Ariyanayakam said several projects that contributed to FY2026 revenue only commenced part-way through the financial year, providing the group with greater visibility into their contribution for FY2027.
Scicom ended FY2026 with a sharp improvement in financial performance, with revenue rising 52% to RM301.8 million from RM198.6 million previously, while profit before tax jumped 147.5% to RM66.6 million from RM26.9 million.
Net profit rose to RM47.2 million from RM20.3 million, while earnings per share increased to 13.29 sen from 5.72 sen.
The group declared total dividends of 12 sen per share for FY2026, more than double the 5.5 sen declared for FY2025.
Leo said the FY2026 improvement should be viewed not simply as a recovery in earnings, but as the potential beginning of a different earnings structure for Scicom.
Revenue growth was accompanied by a substantial expansion in the group’s PBT margin, from 13.6% to 22.1% for FY2026, with the fourth-quarter margin at 21.7%.
He attributed the improvement to operating leverage, lower depreciation and lower foreign-exchange charges, alongside higher transaction volumes from existing contracts and initial contributions from newly secured projects.
“The most important point about FY2026 is that we don’t see it as the end of a recovery story. We see it as potentially the start of a different earnings structure for Scicom,” Leo said.
He cautioned, however, that the group was not assuming that the exceptional rate of FY2026 growth would continue indefinitely.
Instead, management is focused on maintaining a structurally stronger earnings base as projects ramp up and the business mix gradually changes.
For FY2027, Leo identified the full-year contribution from projects won during FY2026 as the most visible growth driver, rather than providing specific revenue or profit guidance.
The group also has an active pipeline across customer lifecycle management and GovTech, although the timing of potential awards and implementation remains dependent on contract wins.
The underlying BPO business also provides an established customer base, with 88% of expiring contracts renewed last year and average client tenure at 7.8 years, according to Leo.
“Beyond FY2027, I see three growth engines: BPO and managed services, AI-enabled technology and GovTech.”
The group’s existing BPO and managed-services operations are expected to remain important because they provide scale, customer relationships, domain knowledge and cash generation.
At the same time, Scicom intends to use AI to improve the productivity of those operations, including increasing the number of interactions handled per employee, improving first-contact resolution, reducing handling time and automating repetitive activities.
The company is also seeking to build a different revenue model through what Leo describes as “digital concessions”, comprising long-duration platforms embedded in essential processes. These include areas such as education, employment, trade, identity and verification.
On capital allocation, Leo said Scicom intends to maintain its conservative balance sheet while investing in software, AI, intellectual property and platforms.
He said the FY2026 dividend was funded entirely from operating cash flow, with free cash flow at RM44.5 million against RM36.4 million in dividends paid, while the group remained debt-free.
The increase in the FY2026 dividend to 12 sen reflects the stronger earnings and cash-generation position, while management said future capital allocation would balance liquidity, investment, acquisitions and shareholder distributions.
The group intends to prioritise investments that generate reusable intellectual property, recurring revenue, transaction economics or strategic positions in digital ecosystems.
