KUALA LUMPUR (Nov 14): Home-grown retailer Mr D.I.Y. Group (M) Bhd (KL:MRDIY) saw a marginal 1.9% drop in its third-quarter net profit, on higher administrative and other operating expenses, which increased by 25.6% and 10.2% year-on-year (y-o-y) to RM56.7 million and RM283.7 million respectively.

Net profit for the three months ended Sept 30, 2024 (3QFY2024) fell to RM121.65 million from RM123.95 million a year earlier, resulting in a lower earnings per share of 1.29 sen compared with 1.31 sen during this period.

The higher administrative and other operating expenses was driven primarily by higher staff costs, depreciation of right-of-use assets and fixed assets, and higher utility expenses, consistent with the group’s business expansion activities and support for its growing store network, said Mr DIY.

It also incurred higher administrative and operating expenses associated with operating its new automated warehouse and other warehouse facilities.

Quarterly revenue, however, rose 6.4% to RM1.14 billion in 3QFY2024 from RM1.07 billion in 3QFY2023, driven by higher
transactions and the contribution of new stores. This was partially offset by a decline in like-for-like sales growth,
reflecting tightening household spending and weaker consumer sentiment during this period, it said.

In a filing with Bursa Malaysia on Thursday, Mr DIY said it opened 49 new stores during the quarter under review, which represented a 15% y-o-y growth, bringing the total store count to 1,389.

"Total transactions rose 9% y-o-y to reach 45.3 million in tandem with the increase in store numbers. However, the growth in transactions was partially offset by a 2.2% decline in basket size, likely due to the aforementioned factors," it added.

Mr DIY declared an interim dividend of one sen per share, totalling RM94.5 million, for the financial year ending Dec 31, 2024 (FY2024), payable on Dec 13. This represented a payout ratio of 77.7% of net profit, surpassing the target payout ratio of 50% to 65%.

For the cumulative nine months ended Sept 30, 2024 (9MFY2024), the group's net profit was up 4.9% to RM421.74 million from RM402.04 million a year earlier, while revenue grew 8.1% to RM3.47 billion from RM3.21 billion a year earlier.

Going forward, Mr DIY said its 2025 growth plan to open 190 new stores across its core brands, including KKV, is expected to drive revenue growth and sustained profitability.

"The group's investment in the KKV retail chain complements its current offering and is projected to further boost overall profitability."

Mr DIY shares closed down 4 sen or 1.87% at RM2.10 on Thursday, giving it a market capitalisation of RM19.86 billion. The stock has risen 44.8% so far this year.