Loxley to scale down state projects in rejig
Trading conglomerate Loxley Plc will reduce dependency on state project revenue, from 70% of total revenue to 40% by 2023, to ensure steady growth and sustain revenue streams over the long term.
The move is to avoid the uncertainty of state-run policies through project procurement and to create better balance in the businesses portfolio, said Loxley president Suroj Lamsam.
Loxley’s revenue streams from state projects mainly come from network solutions, energy and IT business groups.
“We will still focus on selective bids for state-run projects, especially for premium quality products and services,” Mr Suroj said. The company is emphasising highgrowth businesses such as services and food service and distribution.
Mr Suroj said the service business comprises security service and property management service. Food service and distribution services include consumer products, chemicals, inter-trade and food distribution for hotels, Japanese restaurants and cafes.
Loxley operates through 28 subsidiaries and 21 associates.
Mr Suroj said Loxley’s latest direction is part of a major restructuring.
Loxley’s new operational structure is divided into five strategic business groups.
Network solutions includes construction materials, broadcasting and security intelligence networks.
IT includes banking and financial solutions, computer networks and systems, and system integrator solutions.
Services includes security services and property management.
Energy includes renewable energy, electronic vehicles and water supply systems.
Food service and distribution includes consumer products, chemicals, inter-trade and exclusive Japanese food distribution service.
Mr Suroj said the new structure will enable the company to better focus on its genuine core businesses.
Under the new structure, network solutions business generated 26% of the group’s total revenue, followed by 23% from food service and distribution, 21% from IT, 12% from services, 11% from energy and the rest from other businesses.
Loxley group booked total revenue for the first nine months of last year of 11.5 billion baht.
The company has yet to settle its formal financial statements for the full year of 2017.
But Mr Suroj said the group expects total revenue for the full-year operations of 2017 to have risen 15-20% from 2016.
In 2016, Loxley reported total sales and services revenue of 13.7 billion baht, 20% growth from 2015’s 11.4 billion baht.
Gross margin in 2016 was 14.1%, down from 16.7% in 2015, due to strong market competition.
Loxley’s net profit in 2016 was 172 million baht, falling from 353 million in 2014 and 210 million in 2015.
Mr Suroj said Loxley projects total revenue in 2018 of 18 billion baht, or a 15% increase from 2017.
Mr Suroj was appointed as the group’s president last year, replacing Dhongchai Lamsam, who stepped down after nearly four decades at the helm.
Mr Dhongchai, 72, still serves as chairman of the executive board.
Mr Suroj, Mr Dhongchai’s nephew, is the fourth generation to lead the family business. He was previously senior vicepresident for marketing and services for 25 years.