Farm Price eyes double-digit earnings growth for FY2024

Thursday 21 Nov 2024

KUALA LUMPUR (May 14): Vegetable wholesaler and distributor Farm Price Holdings Bhd (KL:FPHB) on Tuesday said it is aiming for at least 10% growth in earnings this year.

Farm Price managing director Dr Lawrence Tiong, who spoke at the company's listing ceremony, pointed out that the company’s unique position as the first public-listed entity in the industry provides them with an opportunity to secure a larger market share.

“I’m confident [that] we can grow our revenue and profit by double digits, giving [us] many opportunities around us,” Tiong said at a press conference following Farm Price’s ACE Market debut. “Farm Price recognises the significant growth potential within the fresh vegetables industry, where our market shares remain under 1% in both Malaysia and Singapore”.

Margin and sales are expected to improve thanks to rising demand from Singapore, where the company plans to set up a base for sales and marketing as part of its expansion plan, he noted.

In terms of markets, Singapore accounted for about 25% of its revenue last year. Most of the sales were still from Malaysia.

Farm Price risks supply chain disruptions, Tiong flagged, though he said the company has built an extensive network of suppliers both in Malaysia and abroad to ensure continuous supply.

Nearly 83% of its vegetables are imported from countries including China, Thailand, Vietnam and Bangladesh, among others.

“If one of our farming areas is flooded, we can quickly source from an alternative overseas supplier,” Tiong said. “This is one of the competitive advantages we have.”

In addition to wholesale and distribution, Farm Price also operates a retail store in Ulu Tiram, Johor, selling fresh vegetables, food and beverage products, and other groceries, directly to end-consumers.

The company has regional distribution centres across the northern, central and southern regions of Peninsular Malaysia, along with a centralised distribution centre in Johor that serves both the Malaysian and Singaporean markets.

Farm Price said it plans to utilise RM10 million from the IPO proceeds to expand its centralised distribution centre by constructing a new operational building, expanding the value-added processing area, purchasing new machinery and equipment, and increasing the number of transportation fleets.

For the first quarter ended March 31, 2024 (1QFY2024), Farm Price recorded a net profit of RM2.67 million, on revenue of RM30.71 million. Excluding listing expenses of RM480,000, its net profit would have been RM3.02 million, while its adjusted net margin was 9.82%, compared with 8.65% when including listing costs.

At the time of writing on Tuesday, shares in Farm Price were traded 17.5 sen or 72.92% higher, valuing the company at RM184.5 million, after 138.41 million shares exchanged hands.

Edited BySurin Murugiah

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