This article first appeared in The Edge Financial Daily, on December 15, 2015.

KUALA LUMPUR: Home-grown news stand and convenience store operator Bison Consolidated Bhd, which aims to expand its presence using proceeds from an upcoming public offer, plans to open 150 new myNEWS.com convenience stores across the country by 2017 from 205 stores currently.

As at Oct 31, 2015, Bison had 237 news stands and convenience stores under its portfolio of brands including myNEWS.com, Newsplus, MagBit and The Front Page. It also operates WHSmith outlets in Malaysia, in a joint venture with United Kingdom-based WHSmith plc.

“It has always been our plan to expand our network of stores. With the proceeds raised from the initial public offering (IPO), certainly we will make use of it to expedite our expansion plan,” Bison founder and managing director Dang Tai Luk told The Edge Financial Daily in an interview.

However, the new stores are unlikely to boost the group’s revenue at the same rate of expansion due to the gestation phase of new stores, he explained.

“Naturally, with more outlets, our revenue will increase at a faster rate, but different outlets will have a unique growth rate. So, we cannot quantify the potential revenue that we can expect to derive from these upcoming outlets,” he said.

According to Bison’s draft prospectus, it plans to allocate 45% of the funds raised from its IPO for capital expenditure (capex) that involves outlet expansion.

Bison posted a net profit of RM12.43 million for the financial year ended Oct 31, 2014 (FY14), down 30.4% from RM17.86 million in the previous year. Revenue, however, rose 15.5% to RM182.41 million from RM157.96 million in FY13.

Bison attributed the decline in net profit to a one-off gain in other income that included a RM6.16 million gain from the disposal of a landed property in Sungai Buloh, Selangor, and a commercial property located in Petaling Jaya, Selangor, in FY13.

Dang recalled that his first revenue target for a day was merely RM1,000 when he was operating his first outlet, called MagBit, in 1 Utama Shopping Centre, Petaling Jaya.

“The first outlet became profitable very quickly, mainly because my wife and I, who were the only staff there, opted not to take any salary. Thankfully, we managed to open our third outlet at Mid Valley [Megamall here] in our second year of operation,” he said.

Dang conceded that he did not imagine that the business would come to an extent of a public listing back then. He just focused on ensuring that his chain expanded with multiple locations.

Last year, Bison commanded an 8.6% share of the local convenience store market by numbers, and 8.3% by revenue.

Dang, who came from a rubber-tapping family in Ayer Tawar, Perak, attributed the success of Bison to the modernisation of the management approach of the group.

“It is the technology that helped us align and standardise the operation of our stores, giving us a good grip of control over them through automatic generated reports, for example,” he said.

Automatic generated reports, according to Dang, are one of the crucial part of the group’s pilferage preventive measures.

“By analysing these reports, we can detect a lot of unusual events across the board, including theft. CCTV (close-circuit television) is normally the final stage of our investigation,” he said.

Unlike the country’s largest stand-alone convenience store operator 7-Eleven Malaysia Holdings Bhd, which had 1,883 convenience stores as at Sept 30, 2015 through a franchise system, Bison operates its stores via its own management.

Dang said Bison implements an incentive-driven model to ensure that employees are motivated to act in the best interest of its outlets.

“On top of the basic salary, the group rewards employees, particularly those in the front-end operation, with monthly incentives based on measurements such as an outlet’s cleanliness, stocks turnover and punctuality,” he explained.

As at June 5, 2015, Bison had 952 employees.

Meanwhile, Dang said the convenience store market remains a resilient sub-sector of the retail industry amid weak consumer spending.

“Retail sentiment is weak, but not in our sector. I think [the] convenience store is the strongest among other retail subsegments,” he said.

Dang is thus confident of the group’s IPO, which will enable it to capitalise on its growth trend moving forward.

However, he declined to disclose the valuation of Bison’s IPO shares, saying the matter had not been finalised.

Public listing in 2015 has been widely viewed as an unfavourable timing due to the weak market sentiment that led to less promising valuations, and resulted in lacklustre interest in undergoing IPOs. More recently, Red Sena Bhd, the country’s first food and beverage special-purpose acquisition company, made a lacklustre debut on Bursa Malaysia last Thursday, opening 21% or 10.5 sen below its issue price of 50 sen per share, despite seeing its retail portion oversubscribed by 4.49 times.

As at Dec 3 this year, there were only eight IPOs on the Main Market of Bursa, versus 12 public listings in 2014.