KUALA LUMPUR: Convenience store chain operator Mynews Holdings Bhd is focused on expanding its footprint in Peninsular Malaysia's East Coast region in the second half (2H) of this year as part of its growth and return-to-profitability strategies.
Founder and group chief executive officer Dang Tai Luk said a lot of work has been directed on repositioning and restructuring its operations in the first half (1H) of 2024, which saw the company merging the operations teams for the brands under the company, mynews and Korean convenience store brand CU Mart.
"We closed down several outlets in 1H due to reasons such as wrong judgment and issues with landlords. 2H will see us opening more outlets," he told Bernama in an interview.
Dang explained that following the changes in 1H, the company has revised the initial target of store openings.
"We have planned outlet openings notably in Kelantan and Pahang, and while our initial aim was 100 new stores, we have amended it to at least 80 new outlets this year.
"Simultaneously, we will release new products, which will assist in increasing sales," he said.
Dang said that the home-grown company is working on pushing CU Mart in the market despite a delay of an additional year-and-a-half in its gestation period due to the COVID-19 pandemic, compared to the average three-year breakeven for developing a new brand.
According to him, the mynews setup can fit into any environment while CU Mart appeals to the younger age group.
"Mynews remains our biggest revenue contributor at about 75 per cent, and CU Mart is in the range of around 25 per cent," he said.
The group achieved a 15.7 per cent higher revenue of RM730.24 million in the financial year ended Oct 31, 2023 (FY2023), contributed by new outlets, longer business hours as well as an improvement in overall in-store sales.
It incurred a lower net loss of RM10.70 million in FY2023 compared to a net loss of RM19.62 million in the preceding year.
The group, which currently operates 622 outlets, returned to the black in 1H FY2024 with first half-year net profit of RM2.99 million against a net loss of RM9.49 million in the previous year's corresponding period, mainly due to improving in-store sales in tandem with higher footfalls across its brand outlets.
In the second quarter ended April 30, 2024, Mynews swung to a net profit a RM1.73 million from a net loss of RM6.28 million a year earlier, while revenue increased to RM192.77 million versus RM174.20 million previously.
Meanwhile, explaining on its day-to-day operations, Dang said the group has two key distribution facilities in Selangor – a cold distribution centre (DC) in Kota Damansara and a dry DC in Rawang – which are essential for Mynews' efficient supply chain and ensure that products reach stores in top condition.
"On top of that, we have a central kitchen located in Kota Damansara which spans 1.21 hectares (130,000 square feet)," he said.
The central kitchen is split into two operations, with Mynews Kineya Sdn Bhd manufacturing ready-to-eat meals and Mynews Ryoyupan Sdn Bhd preparing freshly baked items, all of which are then distributed to mynews and CU Mart stores nationwide.
Mynews Ryoyupan and Mynews Kineya are under the umbrella of Mynews Food Sdn Bhd, a subsidiary of Mynews Holdings, which holds a 51 per cent stake in both companies.
He explained that there is an ample room for production expansion in the current plant, as the central kitchen is only running at 70 per cent of its total capacity.
"We are doing a single shift at the moment, although the kitchen can run up to three shifts," Dang said.
He further said that the company consistently invests in machineries to improve the production and quality of its products.
"In fact, we are investing in a packaging line, as currently we only have one, That's the bottleneck issue we're facing," he added.