ACO Group Berhad (“ACO Group” or “the Group”), established in 1991, is a distributor of electrical products and accessories, debuts on the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”) under the Industrial Products & Services sector category; stock name ACO and stock code 0218.
The Group has 88 brands of electrical and accessories under its name, comprises of 85 third party brands and three own brands.
They are the authorised distributor of Schneider Electric, KDK, Hager, Omron, ABB, Panasonic, Ledvance, Maxguard, Siemens and Yaskawa.
ACO Group raised RM16.2 million from its IPO exercise.
Out of the total IPO proceeds, RM4.2 million (25.9 percent) will be used to set up sales outlets and lighting concept store, RM2.5 million (15.4 percent) for a new head office and distribution centre in Johor and RM2 million (12.3 percent) for the purchase of new trucks and upgrading the Information Technology (IT) system.
In addition, other utilisations include RM 4.2 million (26.1 percent) for working capital and RM3.3 million (20.3 percent) to defray listing expenses.
In a statement during the ceremony, ACO Group’s Group Managing Director, Ir. Tang Pee Tee @ Tan Chang Kim said that since the company was founded, they have weathered many headwinds and business cycles to be where they are today.
“Despite the uncertainties from the Covid-19 pandemic and global economic slowdown, we are aware of the near-term challenges ahead.
“We are here for the long haul and with strong fundamentals and long-term strategies, we focus on growing our market and financial performance,” Tang said.
The Group’s immediate plans is to capitalise and tap into the growth opportunities in the power and construction industries.
“We are not resting on our laurels and are thrilled to embark on our next phase of growth.”
“To strengthen our market presence as a distributor of electrical products and accessories, we will be expanding our product range of third party and own brands, as well as adding more retail touch points and distribution channels throughout Peninsular Malaysia,” he concluded.
Furthermore, the Group will invest in improving customer convenience by upgrading our online ordering and enterprise resource planning (“ERP”) systems.
Geographically, the Group is expanding its foothold in other towns within Johor and in new markets such as Kuala Lumpur, Negeri Sembilan, Kelantan, Terengganu, Pulau Pinang and Pahang with a total of 15 sales outlets, 4 distribution centres, 3 lighting concept stores, and a fleet of 20 trucks by FY2022.
In terms of financial performance, ACO Group reported a revenue of RM104.1 million and Profit after Tax (PAT) of RM6.0 million for the financial period ended 30 November 2019 (“FPE 30 Nov 2019”).
This represents a year-on-year (“y-o-y”) increase in revenue and net profit of 8.8 percent and 39.4 percent respectively.
The improvement in financial performance was mainly attributable to an increase in sales contribution from direct distribution channel along with higher sales of higher margin products.
Alliance Investment Bank Berhad is the principal adviser, sponsor, sole underwriter and placement agent for the IPO exercise.