KUALA LUMPUR (May 23): Focus Point Holdings Bhd (KL:FOCUSP), which sells eyeglasses and runs a bakery chain, expects a boost in retail sales thanks to partial pension fund withdrawals, while margins may expand this year.
The company also believes that the government's planned subsidy rationalisation will have minimal impact on consumer spending, according to its president and chief executive officer Datuk Liaw Choon Liang. Both optical and food-and-beverage sectors are essential, he noted.
"We continue to see strong growth in these two business segments," Liaw told reporters after Focus Point’s annual general meeting. The company also expects better profit margin from cost control measures including lower headcounts and contributions from food business that generally commands better profitability, he said.
Employees Provident Fund's member accounts have been restructured into three separate accounts effective May 11, with 10% of the monthly contributions going into Account 3 that would allow withdrawals at any time.
The pension fund has projected withdrawals of RM25 billion in the first year following the rollout of Account 3. In addition, the government has announced an increase of at least 13% in civil servant salaries beginning December this year that would involve an additional allocation of more than RM10 billion.
In the financial year ended December 31, 2023 (FY2023), the optical business contributed approximately 81% to the group's revenue, while the food-and-beverage business accounted for 16%. The remaining revenue came from other segments (2%) and franchise management (1%).
Focus Point's net profit margin has shown steady growth in past years, increasing from 6.64% in FY2020 to 14.43% in FY2022. However, margin shrank to 11.6% in FY2023 amid higher staff costs and rental from opening of new outlets.
Looking ahead, Focus Point anticipates a strong year for the eyewear industry due to the high prevalence of myopia, particularly among children due to increased reliance on gadgets for e-learning during the Covid-19 pandemic, coupled with extensive computer and notebook use.
Focus Point is aiming to open 20 new outlets for the optical business segment this year across the Klang Valley, Northern, Southern and East Coast regions, bringing the total number of outlets to 200, Liaw said.
Meanwhile, Liaw blamed the 29% decline in online sales within the optical business for FY2023 to lower general spending as well as the Malaysian Optical Council's (MOC) prohibition on selling optical products through e-commerce platforms.
To address this challenge, the group plans to adapt different product offerings to comply with MOC guidelines, he said. Most of the online sales are contact lenses, Liaw continued, “but we have to do better this year in terms of sales from the e-commerce segment.”
At Thursday’s noon break, shares of Focus Point were one sen or 1.18% lower at 83.5 sen, valuing the company at RM383.5 million. Year to date, the counter has risen by over 14%.