PETALING JAYA: Home improvement retailer MR DIY Group (M) Bhd made a stellar debut on the Main Market of Bursa Malaysia yesterday, ending the day at RM1.75 – 9.38% or 15 sen higher than its offer price of RM1.60.
Speaking at a virtual press conference after the listing ceremony, MR DIY CEO Adrian Ong said the group was on track to achieve a total of 900 stores by 2021.
“We have earmarked RM438mil for the expansion of 307 stores across all MR DIY, MR Toy and MR Dollar brands in Malaysia and Brunei.
“The MR DIY brand will continue to be our main focus, while MR Toy and Mr Dollar stores will be the group’s secondary growth drivers, ” he said.
The capital expenditures for each MR DIY store would require RM1.6mil, while MR Toy and MR Dollar stores would require between RM1mil to RM1.2mil each. To date, MR DIY has a total of 674 stores, four of which are located in Brunei.
“The capital expenditure for the store expansion will be financed from our business’ strong cash generation capabilities.
“The cash will also provide sufficient cash flows for us to pay dividends to our shareholders.
“We have a definitive dividend policy to pay out 40% of our net income to our shareholders and we intend to do that using internally generated cash flow, ” added Ong.
From 2017 until 2019, MR DIY registered a compound annual growth rate (CAGR) for its revenue and net profit at 36.1% and 23%, respectively.
MR DIY will also continue to invest in its e-commerce channel, which saw a revenue growth of more than 500% during the first half of the year.
The Covid-19 pandemic has demonstrated the resilience and effectiveness of MR DIY’s business model, as it made a V-shaped recovery in May and June this year, with a higher aggregate revenue of 11.9%, compared to the pre-Covid-19 period of January and February.
MR DIY commands a home improvement market share of 29.1%.
According to independent market surveys, the home improvement market in Malaysia is expected to grow 10.2% to RM10.5bil from 2019 to 2024.
MR DIY independent and non-executive chairman Datuk Azlam Shah Alias said: “The home improvement market is growing, driven by greater urbanisation in Malaysia, growing income levels as well as a culture of modernisation of embracing the do-it-yourself (DIY) culture among Malaysians.”
The listing of MR DIY marks the largest initial public offering (IPO) on Bursa Malaysia in three years, raising a total of RM1.5bil.
From this figure, RM301.4mil is derived from the public issue, of which RM276.1mil will be for repayment of bank borrowings.
The repayment of bank borrowings will provide interest savings of RM15.2mil per annum.
Ong said MR DIY would remain focused on investing in the business by improving operations, management and data systems as the group strived to take the business to greater heights and scale.
“We have the same sets of challenges as other businesses but we are unique in that we have the benefit of being in a growth sector, which allows us to grow our market share, get good returns on capital, and pay dividends to shareholders.
“We have both growth and income, which is something many companies do not have – that is what makes us different from other businesses, ” he said.
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