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PETALING JAYA: Home improvement retailer MR DIY Group (M) Bhd made a stellar debut in Bursa Malaysia’s main market yesterday, ending the day at RM1.75 – 9.38% or 15 sen above its offer price of RM1.60.
In 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 allocated RM438 thousand for the expansion of 307 stores in all the brands MR DIY, MR Toy and MR Dollar in Malaysia and Brunei.
“The MR DIY brand will continue to be our primary focus, while the MR Toy and Mr Dollar stores will be the secondary growth engines for the group,” he said.
Capital expenditures for each MR DIY store would require RM1.6k, while MR Toy and MR Dollar stores would require between RM1k and RM1.2k each. To date, MR DIY has a total of 674 stores, four of which are located in Brunei.
“The capex for the store expansion will be funded by the strong cash generation capabilities of our business.
“The cash will also provide sufficient cash flows for us to pay dividends to our shareholders.
“We have a definitive dividend policy to pay 40% of our net income to our shareholders and we intend to do so using internally generated cash flow,” added Ong.
From 2017 to 2019, MR DIY posted a compound annual growth rate (CAGR) for its revenue and net profit of 36.1% and 23%, respectively.
MR DIY will also continue to invest in its e-commerce channel, which saw 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 rallied in a V shape in May and June of this year, with an aggregate revenue greater than 11.9%, compared to with the period before Covid-19. January and February.
MR DIY has 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 RM10.5 billion from 2019 to 2024.
MR DIY Independent Non-Executive Chairman Datuk Azlam Shah Alias said: “The home improvement market is growing, driven by increased urbanization in Malaysia, rising income levels and a modernizing culture of embracing DIY. (DIY) culture among Malaysians. “
MR DIY’s listing marks the largest initial public offering (IPO) in Bursa Malaysia in three years, raising a total of RM1.5bil.
Of this figure, RM301.4 thousand is derived from the public issue, of which RM276.1 thousand will be for the payment of bank loans.
Repayment of bank loans will provide interest savings of RM 15.2 million per year.
Ong said MR DIY will remain focused on investing in the business by improving operations, management and data systems as the group strives to take the business to greater heights and scale.
“We have the same challenges as other businesses, but we are unique in that we have the benefit of being in a growing sector, allowing us to increase our market share, earn good returns on capital, and pay dividends to shareholders.
“We have growth and income, which is something that many companies do not have, that is what differentiates us from other companies,” he said.
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