Winds of change at MUI

FOR a long time now, hardly anything positive has been taking place at asset rich yet loss-making group at Malayan United Industries Bhd or MUI.

MUI recorded losses amounting to RM131.7mil for FY17, on the back of RM415.1mil revenue, despite the group owning a plethora of good assets.

But on Friday, an interesting announcement was made. The company said it had appointed Andrew Khoo Boo Yeow as its new CEO. Andrew, it turns out, is a 45-year son of MUI’s owner namely Tan Sri Khoo Kay Peng. The appointment also meant that the tycoon Khoo is now elevated to the position of executive chairman, vacating the CEO position for his son.

What now? Last month, rumours surfaced that a big local personality from the corporate scene had his eyes set on acquiring the controlling stake in MUI from Khoo, who owns 47.58% of the company. It is understood that this party had even hired financial advisory firms to approach Khoo, who has been out of the public limelight for several years now.

The appointment of Andrew though gives the impression that Khoo has some plans of reviving the group. The group has good assets but been unable to do much to unlock that value for shareholders.

As of June 30, 2017, the company had properties located across Malaysia, Singapore, Australia, the United States, the United Kingdom and Hong Kong, with a total net book value of RM890.26mil. However, most of the assets have not been revalued recently.

The company has a market capitulation of a mere 615.8mil. For example, the freehold 13-storey Corus hotel located along Jalan Ampang that MUI owns has a net book value of RM54.50mil while the company also holds land, both freehold and leasehold, all over the country. Some of MUI’s noteworthy subsidiaries include London-listed retail chain Laura Ashley plc, Malaysian retail chain Metrojaya Bhd, Corus Hotels Ltd, MUI Properties Ltd, confectionery manufacturer Network Foods International Ltd, as well as stockbroking firm PM Securities Sdn Bhd.

Laura Ashley, a UK brand synonymous with floral dresses and English-style home furnishings, has 167 stores throughout the UK and 243 franchised stores globally.

Senior Khoo is already 78 and having a succession plan sooner rather later augurs well for the company.

Andrew’s appointment to the helm will surely come with fresh ideas and perspective.

Hopefully it is part of a larger plan to unlock value for all shareholders in the group.