The SET-listed furniture company Modernform Group Plc plans to invest in non-core businesses in domestic and overseas markets next year to strengthen its business growth, says its president.
The plan to broaden its business channels is in line with its residential focus, Patana Usanachitt said yesterday.
"As new competitors keep entering the (furniture) market, it is necessary that we look to invest in new businesses as well as in new markets," Mr Patana said."This is our vision for the next five years as we expect good returns ... from increased sales."
Modernform's core revenue comes from two businesses, furniture and decorative products, and its three holding companies, Thai Plaspac Plc, MFEC Plc and Interface Modernform Co, which represent about 30% of total revenue.
CEO Thaksa Busayapoka said the investment would focus on the domestic market. Overseas the company will consider mergers and acquisitions and joint investments within Asia, as it can partly benefit from free trade agreements.
The executives declined to provide specific details for investment plans and budgets.
Modernform reported a 44% yearon-year drop in first-half net profit to 100.77 million baht, on revenue totalling 1.09 billion baht, a 21.78% decrease from the same period last year.
"Since the first half, we've been working very hard to cope with the impact of the recession, delays in product delivery to property projects and fierce competition," Mr Thaksa said.
The company expects to generate revenue of 2.3 billion baht this year, an 11.5% drop when compared with 2.6 billion baht in 2008.
The home furniture and decorative market in the second half is going well with developers rushing to transfer units before tax incentives expire next March,said Mr Thaksa. This has helped offset the slump in demand for office furniture.
The company currently has 670 million baht in backlog sales, about 70% of which are be realised by year-end.
It plans to launch a sub-brand for its door products Readydor by Modernform next month as part of its move to cover a wide range of furniture segments, bringing its total sub-brands to six this year.
Shares of Modernform (MODERN)closed yesterday on the SET at 27.50 baht, up 50 satang, in trade worth 1.363 million baht.
Wednesday, August 26, 2009
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