SHAH ALAM: JAG Bhd
will remain focused on growing its core business of total waste management (TWM) processing, despite recent moves to diversify its income base into the property and the consumer industry.
The group had at the end of last year made a purchase of a RM35.3mil 12½ storey freehold commercial building in Kuala Lumpur that it intends to convert into a lifestyle and wellness centre.
“Our property development and investment arm currently hold three pieces of landbank and one commercial (12½ storey) building.
“In 2023, our focus will be primarily on expanding our property investment business, with a view to create a new stream of recurring income which will positively contribute to the group,” chairperson Datin Stacey Tan told StarBiz.
The group’s aim is to refurbish the building and transform it into a lifestyle and wellness hub eventually later this year.
“We would like to populate the ground and mezzanine floors with food and beverage outlets, a fitness centre or an event space, while the three floors above ground and mezzanine have been earmarked for co-working space, financial institutions or enrichment centres.
The remaining floors will be for corporate and subdivided to smaller offices,” Tan said.
The capital expenditure (capex) plans to renovate the office building would cost up to RM5mil within the next two years, which would be funded internally.
“The property companies are helping us to secure the tenants for this space now,” she added.
While the group would like to diversify its income base into other segments, it still views the TWM segment as its core business and is confident of growing its revenue from this part of the business.
“Apart from serving the traditional semiconductor space, we are also reaching out to the oil and gas industry to secure more businesses now.
“We have met our performance targets for the past three financial years, marking a minimum 10% growth, driven primarily by the TWM business segment that remains the major contributor to our revenue and profit,” Tan said.
“To this end, we will inject a capex of RM10mil into our TWM business. Based on these plans, we expect a stronger revenue base for 2023, which will result in stable profits for the group,” she added.
Meanwhile, the group is also now involved in the consumer-related business through a chain of coin operated launderettes, while it also manufactures and sells gelato and related foods.
“Our coin operated laundrette business is already self-sustainable.
“This segment of our business had experienced a loss in 2020 and 2021 due to the pandemic.
“However, as the market recovered in 2022, our coin operated laundrette business experienced a turnaround, marking profits in the last four quarters since April 2022,” Tan said.
Meanwhile, she said the group’s gelato business, which is marketed under the Frost n Bites trade name, is on track to break-even this year.
“We will continue revamping and rebranding selected outlets this year. Out of the seven Frost n Bites outlets in our stable, three have been renovated.
“A capex cost of RM1mil has been earmarked for this segment,” she said.
“We are also looking to grow our footprint, with a target to expand a maximum of three new outlets this year.
“To-date, we have confirmed to open an outlet in Pavilion Damansara by year-end,” Tan added.
On another matter, Tan also said the company’s decision to pay shareholders back dividends in the form of treasury shares that it had accumulated before (instead of the usual cash dividend) would help them realise an income in the long-term.
