Envictus International (BQD) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 9.8% YoY to RM566.1m, but loss after tax widened to RM32.9m from RM6.4m, reflecting higher operating costs and the absence of prior-year one-off income.

• Food Services and Dairies drove revenue growth; the loss-making butchery business and related Pulau Indah assets were divested after year-end.

Financial highlights

• Revenue was RM566.1m, up 9.8% YoY; gross profit was RM220.2m versus RM192.2m.

• Loss before tax was RM29.3m versus RM3.7m; net loss was RM32.9m versus RM6.4m.

• FY2023 other operating income was RM5.9m, versus RM30.0m in FY2022, which included RM16.6m land-disposal gains and RM5.6m government payroll subsidies.

• Operating expenses rose 14.4% to RM236.3m, primarily due to higher selling and marketing, labour, rent and utilities costs.

Outlook and guidance

• Texas Chicken plans eight outlet openings and six closures in FY2024; San Francisco Coffee targets 60 outlets, up from 49.

• Management expects ongoing margin pressure from input and labour costs, subdued consumer sentiment, currency weakness and geopolitical uncertainty.

• Priorities include cost control, operational efficiency, targeted promotions, digital initiatives, e-commerce growth and pricing reviews across divisions.

• Dairies plans alternative sourcing and selling-price adjustments; Pok Brothers anticipates sustained FY2024 revenue momentum as tourism and regional travel recover.