$FPGROUP / 5277 (FOUNDPAC GROUP BERHAD): Yet another disappointing performance

Here are some updates on Q3FY24 performance: -

📌 FPGROUP operates in four main sectors: precision engineering, laser stencils, automation, and cables and connectors.
📌 Precision engineering is the primary source of revenue and profit for the company, involved in the design, development, manufacturing, marketing, and sale of stiffeners, test sockets, hand lids, and related accessories.
📌 In Q3FY24, FPGROUP experienced a decline in revenue of 6.95% and 8.7% compared to the previous quarter and the same period last year, totaling RM14.41 million. This was attributed to lower sales in precision engineering, laser stencils, and automation, partially offset by increased sales in the cables and connectors segment.
📌 Export sales continue to be the major revenue driver, accounting for RM9.02 million or 62.59% of total revenue, down from RM10.28 million in the corresponding quarter. This decrease was mainly due to higher sales in the cables and connectors segment, primarily in the Malaysian market.
📌 Malaysia contributes 37.41% of total revenue.
📌 Profit before tax increased by 2.03% compared to the previous quarter but decreased by 35.23% year-on-year. The quarterly increase was primarily due to rental income earned from property acquisition in October 2023, while the yearly decrease was attributed to reduced revenue from the automation and laser stencils segments.
📌 The negative free cash flow in this quarter was primarily due to the acquisition of new property, with Flex as the current tenant.
📌 Even so, the company still in the net cash position with RM30.32 million of net cash.
📌 The management has declare dividend of RM0.01 per share which is same with Q3FY23.
📌 While the performance for FY24 is expected to be less favorable than FY23, management is confident that the company's future business performance will improve based on improved market sentiment and increasing market activity.