KTC expects strong revenue growth in FY17
KUALA LUMPUR: Sabah-based consumer packaged goods distributor Kim Teck Cheong Consolidated Bhd (KTC) said it expects a strong double-digit revenue growth for the financial year ending June 30, 2017 (FY17), with its newly secured distribution contracts from SCGM Bhd (SCGM), Anakku Sdn Bhd (Anakku), Marigold and Procter & Gamble (Malaysia) Sdn Bhd (P&G).
“After the IPO (initial public offering), we have successfully built up our infrastructure.
To date, we have 7,087 distribution points, where we have penetrated into 84 districts in East Malaysia, with 21 distribution centres,” its executive director Dexter Lau told reporters after its 2nd AGM here yesterday.
“We are also in talks with a number of brand owners for the possible business avenues and to ensure that we continue to build our brand portfolio,” he added.
For FY16, the group recorded a net profit of RM1.9 million, with a revenue of RM341.16 million.
Lau said the distribution of third-party brands contributes 90% to the group’s revenue and in-house brands the rest.
Other third-party brands that KTC distributes include Coca-Cola, Loreal, Philips and Panadol, while its in-house brands namely Orie, Bamble and Creamos manufactures and distributes frozen and dry goods, as well as bakery products across East Malaysia.
Meanwhile, Lau said the economic slowdown is unlikely to affect the group’s business, as it distributes brands that comprise necessity products, such as personal care, food and beverages, as well as household items.“In terms of consumer market, of course we are experiencing a bit from the economic slowdown. But so far we are experiencing a very minimal impact to the business, as consumers still prefer Malaysia’s brands and local products,” he said.
Asked about the impact from the weakening ringgit, Lau said the group is not much impacted, as its business involves minimal transactions in foreign currencies.
Commenting on its expansion plans, Lau said the group is continuously looking for more acquisitions going forward, noting he is eyeing for a local or foreign company that has a synergistic environment. “We will not stop looking for more acquisitions and attractive deals to help us strengthen our core business in the consumer industry. If the opportunity arises, we will definitely consider it,” he added.
Early this year, KTC made its maiden venture into the overseas market by acquiring a 60% stake in Brunei distribution outfit Grandtop Marketing Sdn Bhd (GMSB) for RM1.79 million.
“With Brunei coming in, we will increase another 600 distribution points. So that takes it up to 7,687 distribution points,” Lau said, noting the acquisition will be completed by the first half of next year.