KUALA LUMPUR: MR DIY Group (M) Sdn Bhd, the biggest home improvement retailer in Malaysia, says the plan to go public to raise funds for expansion will not be immediate.
Marketing vice president Andy Chin did not want to elaborate on the matter but said that any on-going expansion would be internally funded.
Chin told the New Straits Times that Mr DIY’s focus was to expand its stores here and overseas, as well as refurbish the older outlets.
It was reported earlier this year that Mr DIY could list in Malaysia or Hong Kong by the end of 2019 to raise around RM1.5 billion to RM2.1 billion, and seek a market value of about RM10 billion.
However, with the local bourse stuttering, losing billions in market capitalisation and outflow of foreign funds, it may not be a good time to launch the initial public offering.
Mr DIY, backed by private equity firm Creador, was close to meeting its target to have 1,000 stores in Malaysia and overseas by January 2020, said Chin.
The company has opened more than 900 stores since it started business in 2005.
Chin said it has some 600 outlets in Malaysia, and around 350 overseas, with the bulk of them in Thailand. The rest of Mr DIY stores are located in Indonesia, Singapore, the Philippines and Brunei.
"We are growing very strongly overseas. We opened 350 stores in three years and the first outlet was in Thailand in 2016. In 2017, we ventured into Indonesia and a year later we opened stores in Singapore and the Philippines. We are willing to invest in good locations and inventory to serve the customers," he said.
Mr DIY offers around 14,000 types of products in 10 categories, including household, electrical, hardware and toys in all its outlets.
"Our business is more to economies of scale. We put everything under one roof to serve housewives who are looking for home improvement. Revenue has been growing at a healthy rate year-on-year but there is slim margin because our products are priced very low.
“Our highlight is always low prices. The average product in our outlet is RM5.00. We can keep prices low as we buy the products in bulk so we get them at lower price," said Chin.
Mr DIY expects its revenue to grow next year, he said.
The company registered a net profit of RM303 million on the back of a RM1.8 billion revenue in the financial year ended December 2018. In 2017, it posted RM208 million net profit on RM1.22 billion revenue.
"We are in a mass market business where our customers are mostly families and small business owners. If the market is not so good, people come to us. So recession is good for our business," he said.
Chin said the plan for 2020 was to open more outlets here and in its existing markets overseas, as well as expand Mr Toy, its latest venture.
Mr Toy was launched in May this year and sells all range of toys and stationary at very low prices.
"We feel there is potential for us to sell toys and stationary. We do currently sell toys and stationary in Mr DIY and they are doing very well. We decided to have it as as a standalone business. We have opened more than four Mr Toy outlets and next year the plan is to expand the brand," he said.
Source: New Straits Times