Envictus International’s Profitable Turnaround: Key Insights for Shareholders

Envictus International Holdings Limited has reported a notable financial turnaround for the fiscal year ending 30 September 2024. The group achieved a net attributable profit of RM50.6 million, a significant improvement from the net loss of RM32.9 million recorded in the previous year. This positive shift is backed by a robust 21.3% growth in revenue, reaching RM686.8 million, primarily attributed to the strong performance in the Food Services and Dairies Divisions.

The Food Services Division led the growth with a 38.8% increase in revenue, largely driven by Texas Chicken, which saw a remarkable 44.3% rise in revenue to RM390.4 million. This was achieved through strategic operational efficiencies, an increase in 24-hour outlets, higher selling prices, and effective marketing strategies. Meanwhile, the Dairies Division reported a commendable 17.6% surge in revenue, supported by sales volume growth and market expansion.

Shareholders should note the improvement in gross profit margin by 5.7 percentage points to 44.6%, primarily contributed by lower food costs and higher selling prices in the Food Services Division, coupled with lower raw material costs in the Dairies Division. These factors indicate potential for sustained profitability and operational efficiency in the future.

Envictus plans to continue expanding its Food Services Division with the opening of new Texas Chicken outlets and the introduction of menu innovations and Self-Ordering Kiosks. The digitalisation efforts, including the launch of mobile apps in 2025, are expected to enhance the customer experience and drive loyalty.

Despite the positive outlook, the Trading and Frozen Food Division faced challenges with a 12.0% decline in revenue, impacted by a market slowdown and competitive pricing. Furthermore, global events such as the ongoing conflict between Israel and Hamas have affected shipping routes, leading to delays and price hikes that may impact profitability.

San Francisco Coffee, under the Group’s banner, is addressing intensifying competition by launching a new range of premium instant coffee to cater to lifestyle trends of at-home consumption. The Dairies Division remains proactive in managing commodity price fluctuations and foreign currency rates, with plans to expand market share and enhance brand awareness.

As Envictus pursues various growth strategies, including expanding its presence in major hypermarket chains and East Malaysia, shareholders can anticipate continued efforts to boost revenue and improve cost management. These strategic initiatives are crucial for sustaining positive financial momentum and delivering value to shareholders.