BANGI (June 23): Health supplement group Bioalpha Holdings Bhd anticipates a revenue growth of more than 30% yearly, based on implementation of a royalty and e-commerce programme, and exports to the United Arab Emirates (UAE) next year.

Its managing director William Hon said growth was also expected from its recent collaboration with MyAngkasa Holdings Sdn Bhd that enabled them to tap into the cooperative’s customer-base, where it plans to set up an e-commerce and royalty programme.

Hon expects revenue from halal-product exports to the UAE to be reflected in the group’s second- or third-quarter of its 2016 financial year, while it hopes to see a rise in turnover in the third and fourth quarter of this year, from the opening of new retail outlets.

To recap, on Oct 28 last year, Bioalpha signed a memorandum of understanding with UAE-based Fathima Group of Co LLC, which would see its products sold in the latter’s 25 outlets in the UAE and member countries within the Gulf Cooperation Council.

“We expect (revenue) to grow 20% to 30% organically every year, (but) this is without the additional revenue (Lifespring retail outlet, the UAE export venture and e-commerce/royalty programme).

“So we expect turnover to be higher with the new ventures,” he told reporters after the group’s annual general meeting, adding it was also looking at implementing a franchising concept for its retail outlets.

Following its collaboration between the group’s subsidiary Alphacare Sdn Bhd, and MyAngkasa, through an acquisition by the latter on May 14, Hon expressed hope to introduce the concept through a licensing agreement.

It recently opened its LifeSpring health supplement outlet in Mont Kiara here, and was keen on opening another five by the end of 2015, while implementing the e-commerce progamme to tap into MyAngkasa (owned by Angkatan Koperasi Kebangsaan Malaysia Bhd)’s eight million cooperative members.

Through this venture, he said, Biolpha is expected to expand its market share to more than 4% by the end of the year from 3.8% now.

In the meantime, he said the group was also looking at increasing its retail house brand products, which provided better profit margins.

“The original design manufacturer (ODM) customer segment will remain our core, because we also learn from product enhancement (through manufacture). However, our house brands provide better margin.

“So, we hope to balance out the production of our house brands and ODM business, which was about 60:40, respectively,” he said.

On April 27, Bioalpha, which has Finance Ministry-owned Perbadanan Nasional Bhd (23%-stake) and Malaysian Technology Development Corp (17.6%-stake) as its substantial shareholders, was listed on the ACE Market of Bursa Malaysia.

In its first quarter results ended March 31, 2015 (1Q15), Bioalpha heaved itself back into the black with a small net profit of RM14,000, after posting a loss of RM18,400 in the corresponding quarter last year.

However, it achieved a 25.7% increase in revenue of RM3.2 million for 1Q15, from RM2.6 million last year, said Hon, adding widespread exhibitions in Indonesia helped to secure more sales orders, which translated into higher revenue for the group.

“We also forecast more than 50% sales contribution from Hong Kong, China and Indonesia in our second quarter this year, compared to the corresponding quarter last year,” he said.

It was previously reported that Bioalpha had an outstanding purchase order of RM10.26 million to be fulfilled by the end of 2015.

Sales in Malaysia contributed 47.4%, followed by Indonesia at 40.6%, Australia (11.19%) and others (0.77%).

Bioalpha's shares fell one sen or 3.03% to settle at 32 sen at midday today, giving it a market capitalisation of RM152.9 million. About 6.5 million shares changed hands.