Petaling Jaya, 23 Feb 2023,
Focus Point Holdings Bhd’s earnings will be buoyed by its optical and food and beverage (F&B) segments, mainly from new customers, moving forward, says Hong Leong Investment Bank (HLIB) Research.
The research house stated while the eyewear retailer’s revenue for the fourth quarter ended Dec 31, 2022 (4Q22) was in line with its expectations, the results beat consensus estimates at 104% and 108% of full year forecasts respectively.
Revenue for 4Q22 increased by 8% year-on-year (y-o-y) to RM68.4mil and net profits was up by 10% y-o-y to RM10.4mil.
“Focus Point’s top line marked another fresh record of highest ever quarterly revenue.
“This was attributable to improvement in optical related products (up 20%) and franchise management (up 2%) despite the slight drag in F&B (down 15%).
Similarly, the group’s bottom line chalked in the best ever quarterly profit in line with the increase in revenue,” said HLIB Research.
The research outfit also noted Focus Point’s net profits for 4Q22 came after minor adjustments for loss on disposal of property, plant and equipment (PPE), reversal of PPE impairment loss, PPE written off and foreign exchange loss which amounted to RM490,000.
For the financial year 2022 (FY22), Focus Point has issued a total dividend of three sen per share.
Year-to-date, the group’s sales on optical related products, F&B division, and franchise management saw a surge of 46%, 39%, and 26% y-o-y respectively.
“The impressive growth was also supported by the low base effect from the Covid-19 lockdown in FY21.
“F&B flourished with higher revenue from corporate sales and retail outlets.
“Encouragingly, F&B recorded a healthy profit before tax of RM2.3mil (versus FY21 loss of RM1.1mil),” said HLIB Research.
For its optical segment, Focus Point is looking to onboard new corporate clients and expand its Optometrist Anggun business which currently has seven outlets.
Moreover, HLIB Research stated it remains optimistic on the growth prospects of the group’s F&B front, with main contributions from a new client.
“The new corporate F&B client will raise its central kitchen utilisation to 80%, from the current level of 50%.
“As for Komugi, management is looking to expand another two to three outlets in FY23,” said the research house.
HLIB Research maintained a “buy” call for Focus Point with a target price of RM1.61 based on a price to earnings multiple of 14 times.
“We remain confident on the group’s scalable business model as we reckon that both optical and F&B segments are poised to continue its growth trajectory with the group’s brand equity and popularity of Komugi products,” said the research house.