KUALA LUMPUR: Senheng New Retail Bhd posted a 21.2 per cent increase in net profit to RM34.1 million for the nine months ended September 30, 2021 (9M21) from RM28.1 million recorded in the same period previously.
The consumer electrical and electronics (E&E) retailer said this was driven by higher sales generated from ongoing experiential retail store expansions and upgrades.
The company’s revenue rose 12.3 per cent year-on-year (YoY) to RM987.7 million from RM879.6 million on the back of higher average monthly sales generated in the ‘Grand Senheng” stores.
Senheng achieved this despite 58.2 per cent and 21.9 per cent of the company’s stores being shut down in July and August 2021, respectively, to comply with the Covid-19 lockdown.
The revenue surge was also led by Senheng’s telemarketing automation application that enabled continuous sales generation by staff even during the closure of physical stores during the lockdown and targeted digital marketing efforts to attract customers to online stores.
During the period, Senheng had opened one new store and upgraded four existing retail stores to bigger and enhanced Grand Senheng stores, featuring an expanded product range and better consumer experience.
Meanwhile, Senheng registered marginal lower revenue of RM313.8 million for the third quarter (Q3) ended September 30, 2021, from RM322.1 million recorded previously.
This was mainly due to store closures during the Movement Control Orders (MCO) in July and August 2021.
Its Q3 net profit stood at RM10.7 million compared to RM13.7 million previously as the group continued to incur operating and administrative expenses despite store disruptions during the MCO.
Despite the disruptions, the company’s online store contribution doubled to RM31.3 million in Q3 from RM13.6 million recorded in the same period a year ago.
Executive chairman Lim Kim Heng said the double-digit topline growth even during temporary store closures proved the agility and effectiveness of Senheng’s seamless New Retail Model.
“Our nationwide network of retail stores is complemented by the convenience of e-commerce and mobile applications.
“We aim to keep the Senheng brand top-of-mind for customers and drive traffic to our online stores,” he said in a statement today.
The company intends to continue this dual-pronged strategy to enrich the in-store customer experience and leverage digital marketing to provide a wholesome retail encounter.
“We are opening and upgrading our chain of retail stores into larger and more appealing formats,” he said.
Senheng also aims to provide high customer satisfaction to its PlusOne loyalty programme members to draw both new and repeat customers.
“Hence, our new ‘Senheng App’ launched in November 2021 is designed to offer a host of services and convenience to PlusOne members towards reaching that objective,” he said.
Lim said the company is also optimistic about its prospects with the systematic reopening of economic sectors.
Senheng had embarked on multiple transformations since its inception, including its digital transformation in 2015 to improve operational efficiencies and customer experiences.
The company’s latest transition into the seamless New Retail Model in 2017 also integrated its physical stores and back-end functions to its online platforms and Senheng App.
Meanwhile, Senheng is expected to list on the main market of Bursa Malaysia on January 25, 2022, barring unforeseen circumstances.
Applications for Senheng’s initial public offering (IPO) will close on January 10, 2022, at 5.00 pm.
Senheng’s IPO exercise entails the public issue of 250.0 million new shares and an offer-for-sale of 139.5 million existing shares at an issue price of RM1.07 per share.
Of the total of RM267.5 million proceeds to be raised from the public issue, RM160.5 million will go towards setting up new stores and upgrading existing stores into bigger, enhanced concept stores.
The company also aims to upgrade or set up 61 new and existing stores from 2022 to 2024 to elevate the shopping experience of its customers.
Another RM51.7 million will be used to strengthen Senheng’s back-end capacities and capabilities.
This includes developing a new brand distribution business, expanding and upgrading the warehouse and logistics network, and boosting the group’s digital infrastructure.
Senheng will utilise the remaining RM55.3 million to repay bank borrowings and defray listing expenses.
The company has targeted in delivering dividend payouts of at least 30 per cent of net profit.
Source: New Straits Times
