KUALA LUMPUR (March 6): SDS Group Bhd (KL:SDS) has proposed to undertake a bonus share exercise on a one-for-three basis — one bonus share for every three existing shares — to reward shareholders and improve trading liquidity of its shares.

The exercise will see the company’s share base expand from 409.63 million shares currently to 546.17 million shares, according to the bakery products maker and retailer’s bourse filing on Thursday.

For illustrative purposes, post-bonus share issuance, the price of SDS shares is expected to be 85.81 sen, based on the five-day volume-weighted average price up to Feb 24 of RM1.14.

This is the company’s first bonus share exercise or reward initiative — apart from dividends — since its listing on the ACE Market in October 2019.

“This strategic initiative reflects the company’s commitment towards recognising and rewarding its shareholders for the support and confidence in the growth trajectory of the group.” SDS said. 

The exercise is subject to approval from Bursa Securities and SDS’ shareholders at an extraordinary general meeting to be convened later.

The bonus issue is expected to be completed by the first half of 2025. UOB Kay Securities (M) Sdn Bhd has been appointed SDS’ principal adviser for the bonus issue exercise.

For the third quarter ended Dec 31, 2024 (3QFY2025), SDS posted a 19.3% year-on-year decline in net profit to RM8.29 million from RM10.27 million in the same period a year earlier, as revenue edged up 4.3% to RM89.47 million versus RM85.75 million previously.

Shares in SDS ended four sen or 3.81% higher at RM1.09, valuing the company at RM446.5 million.