ACO REMAINS CONFIDENT ON THE LONG-TERM PROSPECTS OF THE ELECTRICAL PRODUCTS INDUSTRY
Johor Bahru, 26 August 2020 – Distributor of electrical products, ACO Group Berhad (“ACO Group” or “the Group”) (stock code: 0218), has concluded its 1st Annual General Meeting (“AGM”) today. All resolutions were approved by the shareholders.
Speaking after the AGM, ACO Group’s Group Managing Director, Ir. Tang Pee Tee @ Tan Chang Kim (陈章锦) said, “Despite the challenges posed from the Covid-19 pandemic, we remain positive on the long-term prospects of the electrical products industry. Electrical products are used across a diversified portfolio of residential, retail, commercial and industrial properties for various purposes such as renovation, refurbishment, new property developments as well as power infrastructure projects.”
“Furthermore, we have established strong customer relationships with industrial users such as contractors, factory and business owners, architects and interior designers. These customers are the largest contributors to our revenue, representing 75% of our total revenue for the financial year ended 29 February 2020 (“FY2020”). By having a broad base of customers who are involved across different projects, we are not over-reliant on any sector.”
The Group is committed to carry out its business strategies as outlined in the Prospectus dated 27 February 2020 to enhance business and operational resilience. This includes expansion of operational and logistic facilities, upgrading of Information Technology (IT) system as well as expansion of product range.
“With the resumption of our business operations on 4 May 2020 following the Movement Control Order (“MCO”) imposed by the Government of Malaysia, our sales are gradually recovering and is almost back to pre-MCO level. In addition, we also observed a shift in our customer buying patterns, as sales from online channels rose to 13%, from 9% previously. This demonstrates the importance for us in having a robust information technology (IT) system that integrates online sales as well as inventory records. That way, we can prevent product shortages while keeping just enough inventory to maintain a healthy cashflow,” he added.
Since listing on the ACE Market of Bursa Malaysia Securities Berhad on 18 March 2020, the Group has made positive efforts in expanding its product range, with the appointment as authorised distributor by European lighting brand, SYLVANIA. With this, ACO Group is now the authorised distributor for 11 international brands, making it a distributor of electrical products with one of the largest authorised distributorships in Malaysia.
ACO Group had also entered into a business collaboration agreement with a health technology solutions provider to distribute rapid test kits for the detection of Covid-19 which have been approved by the Ministry of Health Malaysia (“MOH”).
These initiatives are aimed at improving customer convenience by providing a broad range of products as well as enhancing the buying experience, which are key success factors in supporting the long-term growth of ACO Group.
To fast-track its expansion, the Group had acquired a property in Johor Bahru with warehouse and office facilities for RM10.6 million. This property will serve as the main distribution hub as well as the corporate head office, enhancing operational efficiency and economies of scale.