KUALA LUMPUR (Dec 18): Car leather upholstery maker Pecca Group Bhd, which is actively looking for merger and acquisition (M&A) opportunities, expects to conclude a deal in the first quarter of 2021.

“We are actively looking for a couple of M&A that were put on hold due to the movement control order (MCO). We have initiated discussions and we are looking at some time in the first half of 2021 to conclude the project we are looking at,” the group's chief financial officer Foo Ken Nee told a briefing after its annual general meeting.

According to Foo, the deal is related to its core business, which involves automotive leather upholstery components.

Foo also said while the group is currently relying on its local business, the management hopes to expand its overseas business via M&A.

For the financial year ending June 30, 2020 (FY2020), 17.5% of the group’s revenue came from export markets such as the United States, Europe, Asia as well as Oceania.

“As a growth company, we are always on the lookout for potential strategic opportunities that can enhance our capabilities and bring long-term growth,” he said.

Meanwhile, Pecca is positive on the group’s business outlook as its capacity has returned to pre-MCO levels.

“Our full capacity is about 14,000 car seat covers per month, we are now doing approximately 12,000, which is more than 80% of our full capacity,” Foo said.

He added that the group is poised to deliver more automotive leather seat covers in FY2021, as it received higher orders from its domestic automotive clientele.

He noted that Pecca supplies leather car seat covers for Perodua’s Myvi, Aruz and Bezza car models, and for Proton’s Exora and the newly-launched X50, which has experienced higher sales on strong reception by car buyers and sales tax exemptions.

Foo does not expect the ending of car sales and service tax exemption this month to lead to a slowing down in its car leather upholstery business next year.

“With the new car model launches coming along next year, as well as the increasing trend of car ownership, we are cautiously optimistic that we will see positive trend in the next couple of months,” he added.

At noon break, Pecca shares were one sen or 0.63% lower at RM1.57, valuing the group at RM267.65 million.