Leather upholstery player, has grown leaps and bounds following its listing back in 2016, the group recently achieved an RM1 billion market capitalisation on Bursa Malaysia and is now banking on its aviation segment to unlock its next phase of growth.
Datuk Kelvin Teoh Hwa Cheng, Managing Director of Pecca Group Berhad, said: “In the 2023 fiscal year, Pecca earned nearly 98% of its revenue from the automotive upholstery business. In five years, we aim to derive at least 15% of our earnings from our aviation business.”
In Q1FY2024, the Group achieved a milestone with its first purchase order to service a 180-seat, Europe-registered Airbus A320 passenger aircraft.
The EASA certificate, which we received from the European Union Aviation Safety Agency earlier this year, is opening many doors for us,” Datuk Kelvin Teoh said. “We are now able to serve the wider aviation industry, a market that includes commercial airlines, aircraft lessors and investors, as well as the maintenance, repair and operations (MRO) ecosystem.
The aviation industry is a highly regulated one with stringent demands on quality, standards and turnaround time, which means we may be able to obtain higher profit margins from this business segment.
We are now focused on building a strong and stable customer base with the help of our two partners, Global Component Asia Sdn Bhd and Aero Cabin Solutions, which have strong capabilities and networks in the aviation market. We will also ramp up our marketing activities and efforts to secure approvals with more global aviation authorities.
Our current pipeline indicates an estimated doubling of revenue for Pecca’s aviation segment in FY2024. We expect to gain further momentum as we build awareness, branding, credibility, and confidence with aviation players.”
Pecca was listed on the Main Market on April 19, 2016, with a market capitalisation of RM267 million. Since then, Pecca’s market value has grown 278%, or slightly over 3.7 times. As of December 7, 2023, the stock has delivered an adjusted 805% return to investors over the past five years, vastly outpacing the Bursa Malaysia Industrial Products & Services Index that has been flat over the same period.
The group continues to consistently demonstrate operational and financial strength. In the financial year ended June 30, 2023 (“FY2023”), the Group’s net profit rose 55% year-on-year (“y-o-y”) to hit RM35.43 million, a historical record. FY2023 revenue was RM221.26 million, 35% higher than RM164.39 million in FY2022.
The Group has kicked off FY2024 with another record-breaking quarter. Net profit for the financial period ended September 30, 2023 (“Q1 FY2024”) rose 56% y-o-y to RM13.05 million, driven by higher sales of upholstery car seat covers and improved operational efficiency. Q1 FY2024 revenue came in at RM64.05 million, 17% higher y-o-y. The Group’s cash position rose to RM112.6 million, up from RM111.2 million in Q4 FY2023 and RM86.8 million in Q4 FY2022.
As of today 12 pm the share price remains upward at RM1.35.
