Synergy House Berhad (“Synergy House” or the “Group”), a cross-border e-commerce seller and furniture exporter of ready-to-assemble (“RTA”) home furniture, today announced its financial results for the first quarter ended 31 March 2024 (“Q1 FY2024”). The Group has recorded very encouraging results, achieving a revenue of RM83.7 million, marking a significant 62.22% increase compared to RM51.6 million in the corresponding period last year ("Q1 FY2023").

In Q1 FY2024, Synergy House reported a profit before tax ("PBT") of RM12.3 million, a substantial 245.25% increase from RM3.6 million in Q1 FY2023. This impressive performance is attributed to the Group’s successful marketing efforts in existing markets and expansion into new business platforms.

The Group’s revenue growth was driven by strong sales in both its business-to-business ("B2B") and business-to-consumer ("B2C") segments. The B2B segment recorded revenue of RM40.0 million, a 46.10% increase from RM27.4 million in Q1 FY2023, mainly due to strong sales from a major retailer in the United Kingdom (“UK”) market. Meanwhile, the B2C segment posted revenue of RM43.7 million, an 80.47% increase from RM24.2 million in Q1 FY2023, driven by strong sales mainly from e-commerce platforms in the United States of America (“USA”) and the UK.

Geographically, the United States continues to be the Group’s largest market, contributing RM41.9 million or 50.11% of the total revenue for Q1 FY2024. This is followed by the United Kingdom, which accounted for RM29.1 million or 34.80%, and the United Arab Emirates with RM8.9 million or 10.58%. The Group also saw contributions from Malaysia and other regions, indicating a well-diversified revenue base.

Comparing Q1 FY2024 to the immediate preceding quarter Q4 FY2023, Synergy House reported a slight decline in revenue, amounting to RM83.7 million compared to RM90.8 million, marking a decrease of approximately 7.82%, which saw declines of 2.01% and 13.41% in both the B2C and B2B segments respectively. This dip was primarily due to a reduced revenue contribution from both the B2C and B2B segments in the USA. Despite the typical first-quarter slowdown post-year-end promotions, the company's B2C revenue remained robust and considerably strong, declining only marginally by 2.01% as compared to the traditional peak towards year end, affirming the strength of Synergy House's consumer engagement and market strategies.  The company's profit before tax also reflected this trend, decreasing by 13.38% to RM12.3 million due to the lower sales volumes, but was partially offset by net foreign exchange gains of approximately RM1.6 million.

Executive Director of Synergy House, Mr. Tan Eu Tah commented, “We are very proud of our financial achievements in Q1 FY2024. The significant revenue growth and profit margins comparing against Q1 FY2023 highlight our strong market position and the effectiveness of our strategic initiatives. Our ongoing efforts to expand our B2C segment, enhance our online presence, and enter new markets are yielding positive results. We are committed to leveraging our strengths to capitalise on the vast opportunities within the global furniture e-commerce market.”

Executive Director of Synergy House, Mr. Teh Yee Luen added, “Our performance in Q1 FY2024 reflects the success of our strategic initiatives, particularly in the B2C segment. We are excited about the future and our ongoing efforts to expand our product range and enhance customer engagement. Utilising information technology and artificial intelligence to analyse market trends and customer behaviours has increased our efficiency and accuracy in operating in the B2C segment.”

The Group remains cautiously optimistic about the potential of the global furniture e-commerce market. With its strategies to grow the B2C segment, including expanding customer reach through additional e-commerce platforms, enhancing revenue through advertisements and promotions, and leveraging technology and artificial intelligence ("AI"), Synergy House is well-positioned for continued growth. Despite global economic challenges, the Group’s affordably priced home furniture products and strong presence on third-party e-commerce platforms in key markets are expected to drive further expansion.

As at 28 May 2024, Synergy House's share price stands at RM1.61, reflecting a market capitalisation of RM805.0 million. Notably, this aligns with the 'BUY' coverage initiated by RHB Investment Bank on 29 April 2024, which set a target price of RM1.61.

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