- Convenience stores (7-Eleven) contributed RM449.1m and RM10.2m in revenue and PAT respectively to 1Q2021
- Pharmaceutical (Caring) contributed RM208.1m and RM6.4m in revenue and PAT respectively to 1Q2021
- Higher Group’s PAT at RM13.5m compared with RM11.4m in 1Q2020, an increase of +RM2.2m or +19.1% vs 1Q2020
Review of Current Quarter Performance versus Corresponding Quarter Last Year
The Group’s performance in the current quarter was affected by the Covid-19 pandemic. Our operations and store operating hours were restricted during the various stages of Movement Control Order (“MCO”); several states were placed under the MCO 2.0, from 13 January 2021, which was subsequently replaced
with the CMCO from 5 March 2021.
Convenience Stores Segment
Revenue from convenience stores declined by RM170.6m or 27.5%. Most product categories recorded lower revenue resulting in lower gross profits.
Operating expenses decreased for the current quarter by RM47.0m or 24.8%, due to lower wages from a hiring freeze, lower inventory shrinkages, utilities, maintenance and rents. Excluding expenses incurred for corporate exercise, the convenience store segment recorded a core Profit After Tax of RM10.2m.
Corporate exercise expenses comprise primarily professional fees, interest to finance the acquisition of Caring Group and fair value gain from investments in quoted shares, amounted to RM3.0m for the quarter.
The segment contributed a Revenue and Profit After Tax of RM208.1m and RM6.4m respectively in the current quarter.
The Group’s consolidated Profit after Tax for the current quarter, after taking into consideration corporate exercise expenses stands at RM13.5m, an increase of RM2.2m or 19.1%.
The trading conditions and the overall consumer sentiment will continue to be influenced by the reintroduction of MCO 3.0 nationwide starting on May 2021 and the progress of National Covid-19 Immunisation Programme.
The Group will continue to explore opportunities for growth in other channels and innovation in our product offerings. We will also continue to focus on our customer’s needs, pursuing our core strategy pillars of Operational Excellence, Cost Management and Commercial Innovation, at the same time refreshing the 7-Eleven and Caring brand in the mind of customers though refreshed stores, innovations in our pricing, promotions, and developing exciting products.
Additionally, we note that the retail pharmaceutical segment proved a resilient and defensive sector which was bolstered by the pandemic, as consumer focus shifted towards positive health-seeking behaviours and preventive measures. Thus, we believe this will continue to augur well for the segment and the Group.