MODERN furnishes lower revenue goal

SET-listed furniture maker Modernform Group

Plc (MODERN) has reduced its revenue growth target to less than 10% this year, down from 15%, as the overall home furniture market remains sluggish.

Chief executive Thaksa Busayapoka said the furniture business in the first half continued its decline in recent years, as home furniture sales in the condominium segment slipped.

“The condo market has slowed, particularly in the lower-end segment,” he said. “This significantly affected the overall furniture business, including ours.”

Office furniture saw healthy growth with the completion of new supply in Bangkok and emerging co-working spaces that boosted demand for office furniture.

Home and building renovations are another growing segment, Mr Thaksa said.

The residential sector contributed to 40% of the company’s furniture revenue, offices also generated 40% and the remaining 20% was from decorations.

Though revenue growth this year will likely be lower than the target, the company is confident it will be higher than 3.21 billion baht realised last year.

“Performance in the second half will be higher than in the first half as it is the high season for furniture sales,” Mr Thaksa said. “The period will see a large number of residential projects completed and units transferred.”

In the first half, Modernform recorded 54.84 million baht in net profit on revenue of 1.46 billion baht, up from 40.27 million baht and 1.38 billion baht, respectively.

“The furniture business will see a significant recovery next year after it bottoms out in 2018,” Mr Thaksa said. “We will add new products in the upper-end segment, which generates higher margins.”

The company will invest up to 85 million baht for a 19% stake in Arkitektura Co, a home decoration firm, in the fourth quarter of this year.

Mr Thaksa said Modernform Health and Care Co, one of the company’s subsidiaries, will be listed on the Market for Alternative Investment within the first half next year with Asset Pro Management Co as a financial adviser.

MODERN shares closed yesterday on the Stock Exchange of Thailand at 4.48, unchanged, in trade worth 1.37 million baht.