KUALA LUMPUR (Aug 1): Ekuiti Nasional Bhd (Ekuinas) may have to hold its plan to exit its investment in sportswear retail group Al-Ikhsan Sports Sdn Bhd until next year, considering the current “soft” retail environment, according to its chief executive officer Datuk Syed Yasir Arafat Syed Abdul Kadir.
Syed Yasir said Ekuinas is currently “neutral- to slight negative” on the retail industry, mostly due to the inflationary pressure caused by the government’s rationalisation of certain subsidies.
“I think this year remains challenging, perhaps slightly better. I think there are a fair bit of challenges, [especially] the inflationary pressure because of the removal of subsidies and so on. We can see that people are being more careful in terms of their demand for certain products and services,” he told reporters at a press conference here on Thursday, in conjunction with the Ekuinas Iltizam Catalyst 2023 achievement ceremony.
“So for Al-Ikhsan, maybe what we are going to do is probably to defer it to next year or so, in terms of exit. I think the overall outlook, especially on the consumer side, remains relatively soft,” Syed Yasir added.
It is still unclear whether Ekuinas will exit its investment in Al-Ikhsan via an initial public offering (IPO), or a trade sale.
In May last year, Syed Yasir said Ekuinas was in early discussions to exit its investments in Al-Ikhsan via an IPO or trade sale, depending on its valuation.
Ekuinas acquired a 35% stake in Al-Ikhsan in 2016 for RM68.6 million, marking its entry into the retail sportswear business. Al-Ikhsan currently has over 190 stores located throughout Peninsular Malaysia, according to its website.
A quick check on a CTOS report revealed that Al-Ikhsan generated an audited profit after tax (PAT) of RM41.65 million for the financial year ended Dec 31, 2022 (FY2022), up more than six times compared with its PAT in FY2021 of RM6.81 million. Revenue rose 72.5% to RM485.69 million in FY2022 from RM281.58 million in the previous year. The accounts were audited by PricewaterhouseCoopers.
In April, Al-Ikhsan appointed Datuk Hishammudin Hasan as its new CEO. The 53-year-old Singaporean national previously served as CEO for local sugar refiner Central Sugars Refinery Sdn Bhd from 2018-2020, and convenience store chain operator 7-Eleven Malaysia Holdings Bhd (KL:SEM) from 2017-2018.
Source: TheEdge - 2 Aug 2024
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