ACO Group registers RM26.8 million in revenue during 2QFY2021

ACO Group Berhad, a distributor of electrical products and accessories, has announced its second quarter (“2QFY2021”) and 6 months financial results for the year ending 28 February 2021 (“1HFY2021”).

There are no comparative figures for the preceding year’s corresponding period available as this is the third interim financial report to Bursa Malaysia Securities Berhad in compliance with the ACE Market Listing Requirements since the Group’s listing on the ACE Market of Bursa Securities.

ACO Group’s 2QFY2021 financial results demonstrates the Group’s recovery from the previous quarter which was affected by the Movement Control Order that led to the temporary disruption of business activities.

Compared to the previous quarter, ACO Group’s 2QFY2021 revenue more than doubled to RM26.8 million, from RM11.8 million previously. The Group rebounded with profit after tax of RM1.1 million against a loss after tax of RM1.0 million in 1QFY2021.

1HFY2021 revenue stood at RM38.6 million, of which approximately 78% or RM30.1 million was from the industrial users segment while the remaining 22 percent or RM8.5 million was contributed by the resellers segment.

The Group recorded a gross profit of RM7.8 million, translating to a gross profit margin of 20.2 percent. During the six month period, a one-off listing expenses amounting to RM0.6 million was recognised. Profit after tax for the 1HFY2021 stood at RM0.1 million.

ACO Group’s Group Managing Director, Tang Pee Tee said, “The recovery momentum is encouraging, and we are marching toward our long-term strategic goals. While the current operating landscape has brought upon several challenges, it has also presented us opportunities to accelerate our expansion plans as valuations of certain assets are attractive now. We will continue to explore for potential synergistic investments that are within our financial and risk appetite.”

To fast-track its expansion, the Group had acquired a lease for a property in Johor Bahru with warehouse and office facilities for RM10.6 million.

This property will serve as the main distribution hub as well as the corporate head office, enhancing operational efficiency and economies of scale.

In addition to that, ACO Group recently announced the proposed acquisition of a 49 percent-stake of its industry peer, Focus Electrical Malaysia Sdn Bhd (“FEMSB”), who has a strong presence in East Coast region in Malaysia, for a total purchase consideration of RM7.35 million.

The proposed acquisition will expand ACO Group’s geographical coverage to include East Coast region and enables the Group to leverage on the additional sales outlets and distribution centre of Focus Electrical to grow its market reach.

The Group also announced a proposed private placement of up to 56.5 million new ordinary shares, representing 18.83 percent of its total number of issued shares.

Part of the proceeds of the proposed private placement will be used to partly finance the proposed acquisition of FEMSB and the subsequent working capital injection.

“Digitalisation is another key area of focus for us as we observed a shift in our customer buying patterns. Our online sales have grown steadily since the MCO period from a mere 9% to about 13% of our total revenue. This is a positive indicator for us and this development enables us to further expand our market reach, better manage our inventories, and improve our customers insights. We will continue to invest in growing our online sale channels and integrate information technology (IT) system into our future business operations,” he added.

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