Investor Update: Q2 FY2026 Interim Financial Results & Key Developments

Overview of Financial Performance

• Revenue Growth: The Group reported revenue of RM23.92 million for the second quarter ended 31 January 2026, an increase of RM1.76 million from the preceding year’s corresponding quarter (RM22.16 million). For the cumulative period, revenue reached RM45.6 million, up from RM44.11 million in the prior year.
• Profitability: Profit before tax surged to RM1.89 million in Q2 2026, compared to RM0.48 million in Q2 2025. Net profit for the quarter was also RM1.89 million, significantly higher than the RM0.48 million posted in the previous year. For the cumulative period, profit before tax was RM3.09 million (vs RM0.73 million) and net profit was RM3.09 million (vs RM0.73 million).
• Gross Profit: Gross profit improved to RM4.01 million from RM3.20 million year-on-year for the quarter, reflecting higher margins and better cost management.
• Other Operating Income: The Group booked RM1.28 million in other operating income, a substantial increase from RM0.14 million in Q2 2025, mainly due to fair value gains from quoted investments.
• Fair Value Gains: The Group recorded a fair value gain on investment in quoted shares of RM0.89 million for the quarter and RM2.85 million year-to-date.
• Earnings Per Share: Basic earnings per share rose to 0.12 sen for the quarter and 0.20 sen year-to-date, compared to 0.03 sen and 0.04 sen in the respective periods last year.

Segmental Performance

• Manufacturing – FPP (Further Processed Products): Revenue for FPP was RM20.82 million for Q2 2026 (flat year-on-year), and RM38.37 million year-to-date (down from RM41.56 million).
• Manufacturing – HORECA & OEM: Revenue from HORECA and OEM segments increased significantly to RM3.11 million in Q2 2026 (from RM1.32 million) and RM7.23 million year-to-date (from RM2.56 million). This segment was the main contributor to the Group’s top-line growth.

Balance Sheet Highlights

• Total Assets: RM136.14 million as at 31 January 2026, up from RM133.24 million at 31 July 2025, mainly driven by increases in investment property and other investments.
• Net Assets Per Share: Improved to RM0.0781 per share from RM0.0762 at prior year-end, reflecting stronger equity position.
• Cash & Equivalents: The Group’s cash position declined to RM2.57 million from RM6.03 million, following significant investment in new properties (RM6.51 million spent during the period).
• Borrowings: Total borrowings stood at RM6.11 million, with long-term borrowings of RM5.75 million and short-term borrowings of RM0.36 million. The Group raised RM5.31 million in new term loans during the period.
• Other Investments: RM12.28 million invested in quoted shares and RM0.45 million in short-term investments as at 31 January 2026.

Cash Flow Summary

• Operating Cash Flow: The Group reported net cash outflow from operations of RM1.95 million, mainly due to increases in receivables and decreases in payables.
• Investing Activities: Significant outflow of RM6.51 million, largely due to the purchase of investment property.
• Financing Activities: Net inflow of RM5.00 million was driven by new term loan drawdown, partially offset by repayments of hire purchase and lease liabilities.

Key Corporate Developments & Potential Price-Sensitive Information

• Major Corporate Proposals Announced:
  1. Share Consolidation: The Board has proposed the consolidation of every 10 existing ordinary shares into 1 consolidated share. This may have a significant impact on the share price due to the reduction in the number of shares in issue, potentially affecting liquidity and per-share metrics.
  2. Rights Issue with Free Warrants: The Group announced a proposed renounceable rights issue of up to 312.33 million new shares together with up to 156.17 million free detachable Warrants C, on the basis of 2 rights shares for every 1 consolidated share held, and 1 warrant C for every 2 rights shares subscribed. The terms, entitlement date, and issue price are to be determined. This rights issue is expected to raise significant new capital for the Group and may have a substantial impact on the share price, both in terms of dilution and future growth opportunities.
• No Dividends: No dividend was declared or paid during the period under review.

Other Notable Disclosures

• No Tax Expense: The Group did not incur any income tax expense for the current quarter or year-to-date.
• No Material Litigation or Events: There were no material litigations or events affecting the Group during the quarter under review.
• No Changes in Group Structure: There have been no acquisitions, disposals, or changes in the composition of the Group in the period.
• Accounting Policies: The Group has maintained consistent accounting policies with prior years, with no material impact from new standards or interpretations.
• No Dividend Proposed: The Board did not propose any interim dividend for the current quarter.

Outlook and Prospects

• The Group expects continued positive demand for Further Processed Products (sausages, nuggets, fried products) in coming quarters, supporting revenue growth.
• The management will pursue cost reduction and efficiency improvement initiatives to mitigate rising labour and utility costs and to improve profitability.

Summary for Investors

The Group’s Q2 FY2026 results show solid revenue growth, a strong recovery in profitability, and a substantial increase in other operating income, driven by fair value gains in quoted investments. The HORECA and OEM segment is rapidly expanding, offsetting a slight decline in FPP revenues.

The most significant and potentially price-sensitive development is the announcement of a major share consolidation and a large rights issue with free warrants. These corporate actions could materially affect the share price, shareholder value, and trading liquidity. Investors are strongly advised to monitor further announcements regarding the entitlement dates and pricing of these actions, as well as the intended use of proceeds, as these could signal future growth initiatives or strategic business moves.

Disclaimer: This article is a summary and interpretation of the unaudited interim financial statements and related disclosures as at 31 January 2026. It is not investment advice. Investors should refer to the original documents and consult their financial advisors for detailed analysis and before making any investment decisions. The information contained herein is accurate to the best of our knowledge as of the date of publication, but may be subject to change.

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