Mr DIY e-commerce division sees 500% jump in revenue during 1H20

The company intends to continue inputting the ‘right amount’ of capital investment into the division, says CEO

by NUR HAZIQAH A MALEK / pic by TMR FILE

MR DIY Group (M) Bhd’s e-commerce division is growing exponentially with its revenue rising by over 500% from online purchases in the first half of the year (1H20) and the group expecting the momentum to be sustained moving forward.

CEO Adrian Ong said the company intends to continue inputting the “right amount” of capital investment into the division.

“Although brick-and-mortar stores remain our primary growth strategy, we have also grown our e-commerce business to offer an omnichannel shopping experience to our customers,” he said after the listing of the company on the Main Board yesterday.

He said the brand intends to expand its reach by increasing the number of brick and mortar outlets, with Mr DIY being the primary brand to expand, followed by the well-received Mr TOY and Mr DOLLAR brands.

“Our business has continued to add stores at a very brisk pace, between 2017 and 2019 we’ve added between 110 and 120 stores annually.

“Going forward as we mentioned, we will add a total of 307 stores in the next two years, we will finance (the expansion) using the strong cash generative capability of our business which helps us to not only fund the growth of stores but will also provide sufficient cashflow for us to pay dividends to our shareholders,” he said.

The company made a strong debut on the stock market with early selling met with strong buying leading the counter to close 15 sen or 9% higher at RM1.75 with over 410 million shares traded. Mr DIY initial offer price was RM1.60 and the largest listing on the local exchange in three years.

At yesterday’s close, Mr DIY’s RM10.98 billion valuation makes it the 36th-largest company by market capitalisation on the local exchange.

Mr DIY plans to focus on Malaysia and Brunei markets. Its compounded annual growth rate in the former is expected to be very significant at 10.2% per annum from 2019 to 2024 and is expected to be worth RM12.5 billion according to Frost & Sullivan report on the home improvement market.

Its chairman Datuk Azlam Shah Alias said it is important to recognise the market growth in Malaysia is due to the recognition of the brand, as well as income levels.

“By embracing the do-it-yourself (DIY) culture, there is a high level of modernisation occurring here in Malaysia,” he said.

Mr DIY has a dividend policy to pay out 40% of its net income to shareholders.

The store first entered Malaysia in 2005 with Mr DIY, followed by Mr TOY and Mr DOLLAR brands and now has 674 stores across Malaysia and Brunei.

Ong said the experience in the past 15 years has given the group the conviction the brand is not just one that Malaysians want in good times, but reliable during challenging times.

“What it has taught us is that Mr DIY is resilient and responsive to the times. This year alone, we have opened 81 stores and grown our store network by 13.7%.

“We have continued to invest in our people and have hired over 1,000 new employees during our recent nationwide recruitment campaign; one of the few Malaysian companies to buck the trend in both growth and employability,” he said.

In May and June 2020, the company saw a V-shaped recovery with aggregate revenue 11.9% higher versus the pre-Covid-19 period of January to February 2020.

Mr DIY raised RM1.5 billion from selling shares to both institutional and retail investors.