This article first appeared in The Edge Malaysia Weekly on December 5, 2022 - December 11, 2022

IN a good place with the steady growth of its flagship optical business, Focus Point Holdings Bhd is set on accelerating the development of its food and beverage (F&B) segment, keen to put behind the toughest years of “elementary mistakes” in the foray. Expansion plans are afoot and include new outlets and supplying overseas markets.

“F&B is a segment we want to grow aggressively, as there is plenty of room for expansion compared to our mature optical business. Previously loss-making, our F&B business has become profitable after years of lesson learning leading up to a turning point in 2017, when we added wholesale to the segment. It is a good thing we did not give up,” its group CEO Datuk Liaw Choon Liang tells The Edge.

Focus Point’s optical business is still the mainstay, contributing some 60% of group revenue, followed by F&B (about 30%), and franchise businesses including LASIK centres (about 10%).

Within the F&B segment, Focus Point has 11 Komugi retail stores selling Japanese baked goods and pastries in Malaysia (along with 20 retail stores by franchisees in the Philippines and four in Brunei), and a wholesale arm supplying in-house pastry offerings to its corporate customers locally including FamilyMart, Starbucks, Don Don Donki, Aeon Co (M) Bhd and Sushi King. Negotiations to supply to an airline company are underway, Liaw says, adding that the company is looking for big corporate clients to supply pastries to.

“We are committed to coming up with new offerings to grow our wholesale business,” Liaw says, explaining that Komugi’s wholesale business is bigger than retail in terms of percentage ratio. The food products are prepared at the group’s two central kitchens in Kota Damansara, which are running at almost 50% capacity. Therefore, a third kitchen is being sourced.

Focus Point is in the process of shifting its Komugi retail outlets in shopping malls to street shoplots, having learnt a valuable lesson from the pandemic.

“Covid-19 taught us a good lesson in that a bakery business should be open without restrictions. We have seen many F&B brands move from shopping malls to street outlets, [where] the rental is cheaper and turnover is up to expectations. We are planning for the opening of three to four street shops next year, and looking into further developing the Komugi café concept. We now have two of these outlets,” Liaw says.

Plans to tap the fast-moving consumer goods market with the launch of chilled delicacies — starting with frozen macarons to be supplied to supermarkets, hypermarkets and petrol stations — are in progress. It will also give the group the opportunity to explore supplying to export markets, Liaw says, explaining that the product is already available.

With the acceleration in the group’s F&B segment, he expects the division’s contribution to group revenue to increase to at least 50% in the next two to three years, from 30% currently.

Over the five years from FY2017 to FY2021, the group reversed net losses of RM457,000 to a net profit of RM14 million. Revenue ranged from RM165 million to RM191 million; in FY2021, it amounted to RM170.4 million.

Liaw explains that cost-cutting efforts, rental rebates from landlords as well as wage subsidies during the height of the pandemic in 2020 and 2021 were largely responsible for the improvement in profitability.

Net profit for the first nine months of the financial year ending Dec 31, 2022, was RM25.4 million, a 433% jump from RM4.76 million last year, while revenue climbed 68.7% to RM180 million.

He says: “The second- and third-quarter results for our optical segment have shown a V-shaped rebound since the reopening of international borders in April. We achieved record-high numbers, as retail sales have been doing very well, especially in the southern region such as Johor Baru, which attracted [the return of] Singaporean customers.

“Johor had always been a good region for us, but it performed the worst during the pandemic. When the borders lifted, however, our overall retail business across the country picked up and gave us one of our best quarterly performances.

“We are scrutinising our product mix, which is resulting in better margins as well as better bargaining power with our local and overseas suppliers.”

Liaw, along with his wife, Datin Goh Poi Eong, and son Kelvin Liaw Kai Xuan, holds a controlling stake of 54.57% in Focus Point. He is a registered optician with the Malaysian Optical Council with more than 30 years’ experience in the professional eye care industry and was appointed to its board in December 2009.

Fifteen new optical shops were opened this year, including that of new brand Optometris Anggun in March. The mid- to high-end brand targeting the Malay demographic has a total of seven stores in Johor, the Klang Valley and Penang.

Liaw explains that Anggun, along with Whoosh!, the group’s mass market optical brand launched in 2015, will complement the steady growth of Focus Point, which has more than 180 outlets in major and neighbourhood shopping malls across the nation, according to its website.

At least 12 to 15 optical outlets will be opened in malls such as Tun Razak Exchange, 118 Mall and Pavilion Damansara Heights from the second to fourth quarters next year, barring unforeseen delays in the launch of the new retail centres.

“We will continue to focus on growing our three optical brands in the Malaysian market for the next three to five years,” says Liaw, who believes that high inflation, the weakening ringgit and changes in Malaysia’s political landscape would not have a significant impact on the group.

“Next year’s growth may not compare to this year’s [strong post-pandemic revenue] rebound, but we believe we see will strong single-digit growth in 2023 as contributions from our new optical outlets come in.”

LASIK is another area of focus, given the increasing interest in the treatment among the younger segment of its customer base. “We have plans to expand our LASIK — laser vision correction — business, as there is still room for growth, and we had [not paid much attention to it] in the last 20 years.”

The group owns ExcelView Laser Eye Centre Sdn Bhd in Mid Valley Megamall, providing private ophthalmology and optometric treatment services.

Another milestone looms as Focus Point’s long-awaited transfer to the Main Market of Bursa Malaysia may be completed soon, following the Securities Commission Malaysia’s approval last month.

Pending approvals are those of shareholders at an extraordinary general meeting on Dec 15 and Bursa Malaysia, after which the group is expected to start trading on the Main Market in January.

“It is hoped that the transfer will heighten Focus Point’s reputation and status, thereby attracting more investors as we expand aggressively,” Liaw says.

Despite the pandemic, the company continued to pay dividends. In FY2018, it made a payout of one sen per share, rising to 2.5 sen per share the following year. In FY2020 and FY2021, dividends dipped slightly to two sen per share.

Shares in Focus Point have risen 28.1% to close at 82 sen on Dec 2 from 64 sen, valuing the company at RM270.5 million.

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