KUALA LUMPUR: Traditional healthcare company Hai-O Enterprise Bhd expects a "better" financial year ended May 31, 2015 (FY15), as it retires legacy products and replaces them with new, higher margin products launched this year that comply international standards, said Group Managing Director Tan Kai Hee.
"We are optimistic that our overall performance will be better next year despite a challenging operating environment. We should be able to maintain our sales volume and our key fundamentals are strong," Tan told pressmen after Hai-O’s annual general meeting today.
Tan said the the group is also considering a 100% dividend payout for FY15 in conjunction with Hai-O's 40th anniversary, to reward its long-term shareholders for their support over the years. Hai-O presently has a dividend policy of distributing 50% of its profit after tax to shareholders.
He also revealed that Hai-O is looking at revaluing its properties next year, which have been recorded in the books at cost price, but he did not elaborate further.
The group's 2014 annual report showed that it has properties in the Klang Valley, Pahang, Johor Bahru and Kuching, with a net book value of at least RM90.4 million.
Meanwhile, Hai-O’s general manager for its multi-level marketing (MLM) division Teoh Nee Siang said “small-ticket” items currently contribute to more than half the revenue from his division, and has been cushioning decrease from “big-ticket” items as overall market sentiment slows down.
“We have been on track in the past two years, diversifying our product portfolio to a wider range, such as food and beverage, personal care and nutrition, which are seeing positive contributions in sale,” he said.
Hai-O, which derives 59% of revenue in FY14 from its multi-level marketing segment, reported a 29.2% decrease in net profit to RM6.22 million in the first quarter ended July 31, 2014 (1QFY15) from RM8.79 million in 1QFY13, while revenue fell 9.0% to RM49.78 million from RM54.68 million.
It closed 1 sen down at RM2.46 at market close today, giving it a market capitalisation of RM480.91 million.