KUALA LUMPUR (May 13): MR DIY Group (M) Bhd said Friday (May 13) that its net profit for the first quarter ended March 31, 2022 (1QFY22) fell 19.46% to RM100.5 million from RM124.79 million a year ago, due to higher expenses that are in line with higher store openings.
Its revenue, however, climbed 4.02% to RM905.16 million from RM870.18 million a year ago, driven by contribution from new stores, the company said in a bourse filing.
The group declared an interim single tier dividend of 0.7 sen per share (approximately RM44 million) in respect of the financial year ending Dec 31, 2022, to be paid on June 24. This represented a payout ratio of 43.8%.
MR DIY said in a statement that the lower profit for the quarter was mainly due to cost factors outpacing revenue growth, impacting overall profit margins.
During the quarter, the group’s store network grew by a net 47 stores across its three brands, comprising 44 new MR DIY/DIY Express stores, two new MR DOLLAR stores and one new MR TOY store.
As at March 31, 2021, total number of stores stood at 947, comprising 841 MR DIY/DIY Express stores, 51 MR TOY stores and 55 MR DOLLAR stores.
The group aims to open 133 more stores across all brands in 2022.
Meanwhile, the group’s cash flow and balance sheet remained healthy in 1QFY22, with net cash flow from operations standing at RM79.6 million whilst the group’s net gearing ratio remained a comfortable 0.01 times, having reduced significantly compared to 1QFY21 following further repayment of borrowings during the quarter.
Commenting on the results, its chief executive officer Adrian Ong said, as a group, MR DIY has made significant progress over the last two years, despite facing various challenges including a pandemic, supply chain disruptions, escalating input and freight costs as well as a weakening currency.
He said the emergence of the fourth wave of the Covid-19 pandemic in February 2022, with its highly infectious Omicron variant, drove up infection rates, while foot traffic to stores and consumer spend were consequently lower as the public erred on the side of caution to reduce the risk of infection.
According to him, the high number of cases also resulted in several MR DIY stores being closed intermittently for sanitisation and cleaning to ensure the health and safety of customers and staff.
“We remain committed to supporting our fellow Malaysians during this challenging period by ensuring that they have access to a broad assortment of everyday household essential items and at ‘Always Low Prices’.
“We have been able to maintain this commitment largely through our unrelenting focus on managing operational efficiencies, our flexible business model, and our close direct relationships with manufacturers and logistics providers. Our strong cash position and excellent payment terms mean we can also negotiate favourable prices with our suppliers; all these have enabled us to manage both our top and bottom lines effectively,” said Ong.
To stay on track for steady, sustainable growth, Ong said MR DIY is constantly on the lookout for new and innovative ways to deliver a breadth of products at convenient locations and on accessible platforms.
He said the group used stringent data discipline to optimise its inventory and ensure the continued relevance of its products, while gradually growing its range of own brand products to give customers more choice.
It was also actively exploring partnerships with like-minded brands to find new ways to deliver MR DIY products to customers.
“We are positive about the future. The country’s move into the endemic phase, the gradual lifting of movement restrictions and the high vaccination rate thanks to the government’s free vaccination programme have primed the country to a return to a new normal, and with it, the resurgence of the retail industry. We are confident that under such conditions, we will be able to deliver long-term sustainable growth and value to our stakeholders,” said Ong.
According to him, the group’s strategies for growth remain consistent — the carefully-curated expansion of its store network across all brands, driving same-store-sales growth, managing its supply chain and improving cost efficiencies and employing stringent data discipline.
“The home improvement industry is expected to grow at a compound annual growth rate (CAGR) of 10.4% over five years from 2021 to 2026 (Source: Frost & Sullivan), which indicates that there is significant scope for our business to further penetrate the home improvement retail market,” he added.
MR DIY closed 12 sen or 3.5% higher at RM3.55 on Friday, valuing the group at RM21.55 billion. Year to date, the counter has fallen 2.2%.