My Key Takeaways from Econframe’s FY2024 Annual Report

Econframe Berhad has wrapped up its FY2024 on a high note, and its annual report showcases the company’s strong performance and solid growth plans.

Here’s what you need to know:

Econframe recorded its highest-ever revenue of RM103.5 million in FY2024, a significant 36.4% jump from RM75.9 million last year. This marks the third year in a row the company has hit record revenue.

To share the success with shareholders, the company declared a 2.0 sen dividend per share, which works out to a 63.7% payout ratio, a clear signal of Econframe’s commitment to rewarding investors.

Most of Econframe’s revenue came from its manufacturing segment, contributing RM86.4 million, or 83.5% of the total. Meanwhile, the trading segment brought in RM17.1 million, showing an impressive 61.7% growth year-on-year.

The company’s gross profit climbed to RM28.0 million, maintaining a healthy 30.6% gross profit margin, which it has consistently delivered for the past three years. After adjusting for acquisition costs, its profit before tax (PBT) would have been RM19.6 million, showing the company’s strong underlying earnings.

Econframe’s acquisition of Lee & Yong Aluminium Sdn. Bhd. (LYASB) has proven to be a strategic move. LYASB contributed RM4.0 million in profit during its first year, meeting its guaranteed target. The acquisition has also tripled LYASB’s order book, boosting Econframe’s capabilities in aluminium glazing and facade solutions.

The company also recently acquired assets from Duroe Glass Sdn. Bhd. (DSSB), including machinery and vehicles, for RM3 million, further strengthening its capabilities in glass processing. This acquisition supports Econframe’s growing product portfolio and positions it to meet increasing market demand.

Econframe’s financial health is impressive. The company has total assets of RM148.1 million, and its net cash position stands at 10.9 sen per share, giving it plenty of flexibility to fund future growth.

For FY2024, Econframe generated RM12.1 million in positive cash flow, showing how well it manages its operations. Its return on equity (ROE) of 9.8% and return on assets (ROA) of 7.9% are further proof of the company’s efficiency in turning its resources into profits.

Econframe operates across several key areas:

Door Systems: Offering customised solutions for metal doors, fire-resistant doors, and more, tailored to clients' needs.

Aluminium Glazing and Facade Products: Enhanced capabilities thanks to the LYASB acquisition.

Electronics and Electrical Systems: Customised home security solutions for residential and commercial use.

Solar Energy Systems: Growing focus on renewable energy solutions for commercial and industrial buildings.

Econframe’s FY2024 performance highlights its ability to consistently grow its business while managing challenges effectively. With strong financials, smart acquisitions, and a clear focus on key growth areas, the company is in a great position to deliver more value to shareholders in the coming years.

It’s a solid example of a company that’s both growing and rewarding its investors along the way.