KUALA LUMPUR: Home improvement retailer MR DIY Group (M) Bhd is set to open a record number of stores this year after posting record-setting financial results in the fourth quarter ended Dec 31, 2021 (Q4’21).
Chief executive officer Adrian Ong said MR DIY aims to open 180 new stores nationwide this year, bringing the total number of stores across the group to 1,100.
“Our plan is to grow our total store network across our four brands – MR DIY, MY DIY Express, MR Toy and MR Dollar.
“It is important to note that we continue to accelerate store additions because of the strong economic model of the MR DIY brand.
“In fact, we have been adding stores at a steady pace since 2005 and have had positive ‘Same Store Sales Growth’ every year with the exception of 2020 due to the Covid-19 speedbump,” he told StarBiz.
MR DIY operated 900 stores nationwide as of Dec 31, 2021.
The opening of a bumper 180 retail stores in one year would mark the highest number of store openings for the company.
Chief executive officer Adrian Ong said MR DIY aims to open 180 new stores nationwide this year, bringing the total number of stores across the group to 1,100.
For this year, Ong explained that MR DIY would continue to drive store growth, improve operational efficiencies and remain relevant to its customers.
“We will continue to find new and relevant ways to deliver on ‘Always Low Prices’. There are several more initiatives lined up as well,” Ong said.
Despite the spread of the Omicron variant, Ong pointed out that the number of transactions continue to rise steadily for the group, allowing it to remain on course for a steady and predictable growth.
In a filing with Bursa Malaysia yesterday, MR DIY said its net profit climbed 24.2% to RM134.6mil in Q4’21 from RM108.3mil a year ago driven by higher revenue.
Revenue jumped 27% to RM975.4mil in the quarter from RM768.3mil in the corresponding period a year ago, driven by an increase in the total number of stores as well as the lifting of lockdown and other restrictions which were imposed earlier in the year.
“The higher revenue in the quarter was also driven by higher average monthly sales per store as well as higher average basket size, which rose about 4% and 7% year-on-year in Q4’21 respectively,” the group noted.
For the financial year ended Dec 31, 2021 (FY21), MR DIY’s net profit rose 28.1% to RM431.83mil from RM337.16mil a year ago.
Its revenue also increased 31.8% to RM3.37bil for FY21 compared to RM2.56bil in the previous year.
MR DIY also declared a dividend of 0.9 sen per share for the quarter.
However, depending on the severity of the Omicron variant, Ong sees slower growth of the global economy as well as global supply chains and labour markets being affected.
As such, he said MR DIY would continue to focus on improving operational efficiencies and managing its costs this year.
Despite the continuous aggressive expansion plans within the country, Ong said the group is not opting to embark on expanding its stores overseas as it is primarily focusing on both the Malaysian and Brunei markets.
“We are not considering any such proposals at this time. We remain confident that there are still significant growth opportunities in Malaysia,” he added.
Citing an independent market researcher Frost & Sullivan report in 2020, MR DIY remains bullish on the outlook of the home improvement industry, noting that the sector is poised to grow at a compounded annual growth rate of 11% over five years in the 2020-2025 period.
Pre-Covid-19, Ong said the home improvement sector grew by a robust 12.7% per year.
That said, Ong said the group’s market share in the sector has grown considerably by about 5% per year in the past few years.
Even since the beginning of the pandemic, he noted that MR DIY’s market share improved to 34.6% in 2020 from 29.1% in 2019.
“A combination of the growth in market share and size of the market has allowed us to continue to grow our revenue at a compounded rate of approximately 28% between 2017 and 2020, which has more than doubled.
“We expect to continue to be a significant part of this growth going forward,” explained Ong.
However, he disclosed the challenge of the industry is to to stay ahead of the consumer behaviour change as it continues to evolve.
“At MR DIY, we practice strict data discipline which provides us valuable insights into what our customers are buying, where and how they buy it, what prices they are willing to pay, what trends influence purchase behaviour, and which geographies provide growth.
“This information in turn drives store growth, inventory management and cost control, which helps us achieve sustainable revenue and profits.
“It is a proven model, and one that our business is strongly anchored on,” Ong noted.
Moving forward, MR DIY remains confident that it is well positioned to continue to deliver sustainable long-term growth driven by the strength of its business model, strong unit economics of its flagship MR DIY stores and the ability to execute on its strategic initiatives of new store growth.