KUALA LUMPUR: Only World Group Holdings Bhd, which is slated to debut on the Main Market of Bursa Malaysia on Thursday, plans to widen its network of food service outlets (FSOs) in the Genting Highlands, and upgrade the group’s three Wet World water theme parks in Shah Alam in Selangor, Batu Pahat in Johor, and Pedas in Negeri Sembilan, post listing.

There are currently 27 FSOs in its existing network, with plans to add 10 more with an average capacity of 120 seats per outlet in the first half of 2015 using RM10 million or 20% of the RM50 million it hopes to raise from its initial public offering (IPO).

Half of these new outlets will be in Genting Highlands, where Only World is one of the largest third-party operators with an existing stable of 17 FSOs. Meanwhile, Penang and Putrajaya will play host to Only World’s FSO brands for the first time in 2015.

“We do not have a “scatter brain” business model where we mushroom everywhere or open up in shopping malls. We integrate our FSOs carrying our brands in specific locations such as Genting Highlands and our amusement parks. That way, we have access to a captive market,” the group’s managing director Datuk Richard Koh told The Edge Financial Daily in an interview.

Koh said the strategy has been successful so far for Only World. Its FSO segment accounts for RM59.92 million or 71.36% of the group’s total revenue for the year ended June 30, 2014 (FY14). FSOs in Genting Highlands alone contribute 90% of the segment’s revenue.

With 10 new outlets, Only World expects to see a “reasonable improvement” in its FY14 numbers, which had declined 7% from FY13’s RM63.7 million upon the closure of the outdoor theme park in Genting Highlands.

Only World’s earnings will also get a boost from upgrading works at its water theme parks, which currently contribute 12% to the group’s revenue. For a start, RM3 million from its IPO proceeds will be set aside for developing new facilities at the Shah Alam water theme park over the next two years.

“We want to add more ‘play value’ and encourage visitors to spend longer hours at the theme parks. When that happens, all supporting facilities such as our FSOs and retail outlets will do better,” he said.

Koh said the upgraded parks will allow Only World to charge higher admission fees and attract customers with more spending power.

The group is also planning to start a franchise programme for its Only Mee brand in the first quarter of 2016 to generate a new revenue stream.

Beyond this, it wants to replicate its “proven business model” in Penang, with the Kompleks Tun Abdul Razak (Komtar) Tower revitalisation project as its platform.

Only World secured a deal with the Penang Development Corporation to refurbish five floors of the iconic tower and RM30 million or 60% of the IPO proceeds will be used for this purpose.

Once completed in the third quarter of 2015, the five floors will have two multi-purpose halls; fine dining, entertainment and recreational outlets; a lookout deck and a rooftop skybar. Koh said he aims to create a new tourist destination, with Komtar to attract up to 1.4 million visitors in a few years’ time.

In exchange, Only World gets a 45-year lease, with an option to extend for 15 years on the five floors. The average rental rate is RM0.69 per sq ft.

Analysts have called the project a “key earnings driver” for Only World and Koh confirmed that revenue and profit contribution from the project will be “very highly significant”.

“For revenue, we are looking at Komtar as a ticketed destination and will offer combination packages for activities with a view from the tower. We will also have merchandising outlets. We cannot give a forecast but as a guide, we have 27 FSOs with about 48,000 sq ft generating revenue throughout Malaysia. The Komtar tower alone is 130,000 sq ft. It is not a direct comparison but it gives you an idea of what will come from it,” he said.

Koh said the listing on Bursa Malaysia is just the start of what he foresees as a long and exciting journey for the group.

“So you can buy the share, keep it and watch us fly,” he quipped.

This article first appeared in The Edge Financial Daily, on December 15, 2014.