New stores support Mr. DIY earnings for 2022

Top Malaysian home improvement retail chain Mr. DIY posted a 9.3 per cent rise in its revenues for the fourth quarter of 2022. The increase was generated by having more branches across the country. Operating eponymous stores in Malaysia and Brunei, the company disclosed revenues of 1.065 bn Malaysian ringgit (MYR, EUR 226.9 mio) during the period under review. This followed 20 per cent growth in its store network across all brands - Mr. DIY, Mr. Toy (its toy retailing brand) and Mr. Dollar (its fixed price retailing brand) - from 900 to 1 080 at the start of the year. This led in turn to a 15.2 per cent rise in the volume of transactions to 38.1 million, the company added.

For the full year, the company earned close to MYR 4 bn in revenues, up by 18.2 per cent from the previous year, indicating that the relatively slow fourth quarter could have pulled down the strong sales of the previous two quarters. Of these, the Malaysian operations contributed MYR 3.969 bn while Brunei yielded MYR 30.852 mio.

In a statement, the company characterised the business environment of 2022 as "challenging". It noted that sales were adversely impacted by inflation, which accelerated to 3.3 per cent in 2022 from 2.5 per cent the previous year in Malaysia.

Mr. DIY’s chief executive officer Adrian Ong expressed optimism for the company in the coming year, but also acknowledged challenges. "The group is optimistic about its prospects going forward, given the positive post-pandemic sentiment,” he said. But he added that "there are still concerns about the impact on household income, given rising interest rates and increases in the cost of living".

The company plans to open 180 branches across the three brands this year, the same target it had for 2022. Ong said the "measured" expansion strategy will bring the company's store network to 1 200 branches by the end of 2023. This will "further cement the group's position as the largest home improvement retailer in the country, whilst continuing to provide our customers with value, convenience and a wide range of products at unbeatable prices," he noted.

Analysts noted that inflationary pressures are likely to continue to dampen consumer sentiment and affect Mr. DIY's earnings. Some indicated, however, that the price rises imposed by Mr. DIY could cushion the effects of reined-in shopper spending.