SYNERGY HOUSE RECORDS ROBUST RESULTS WITH RM270.2 MILLION REVENUE, PROFIT AFTER TAX SURGE BY 63.25% IN FY2023

Synergy House Marks Stellar FY2023 Close with Encouraging Second Dividend Announcement

SHAH ALAM, 27 FEBRUARY 2024 – 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 the financial results for the fourth quarter ended 31 December 2023 (“4Q FY2023”). In light of the Group's exceptional performance, a second single-tier interim dividend of 0.6 cent per ordinary share has been declared for the current quarter, reinforcing the Group's dedication to rewarding shareholders.

In 4Q FY2023, Synergy House posted a remarkable revenue of RM90.8 million and a profit after tax (PAT) of RM10.3 million, marking a 31.08% increase in revenue and a 27.16% increase in PAT as compared to the revenue of RM69.2 million and PAT of RM8.1 million recorded in 3Q FY2023. This exceptional performance for the current quarter is largely attributed to Synergy House’s strong growth in revenue for the business-to-consumer (B2C) sector, along with the stable performance in its business-to-business (B2B) operations.

For the entire financial year ending 31 December 2023 (“FY2023”), the Group reported a total revenue of RM270.2 million and a PAT of RM27.1 million, indicating a 39.21% increase in revenue and 63.25% increase in PAT as compared to the revenue of RM194.1 million and PAT of RM16.6 million recorded in the previous financial year ending 31 December 2022 (“FY2022”).

The geographical revenue distribution, encompassing contributions from the United States of America, leads with RM139.2 million, representing 51.52%. This is followed by the United Kingdom with RM88.5 million, representing 32.75%, while the rest comes from emerging markets such as the United Arab Emirates with RM31.2 million (11.55%), Malaysia with RM8.8 million (3.26%), and Asia with RM2.1 million (0.78%). Additionally, we have commenced our B2C sales in Germany as well towards the end of the financial year, contributing to our global presence.

The B2C segment was particularly significant, contributing RM121.7 million for the FY2023, represent a 145.37% increase in total B2C revenue of RM49.6 million recorded in the FY2022. This underscores the success of Synergy House’s targeted focus on and investment in the B2C sector. Meanwhile, the B2B revenue had also increased to RM148.5 million in FY2023 from RM144.5 million in FY2022, representing a 2.77% increase.

Executive Director of Synergy House, Mr. Tan Eu Tah commented, "We are immensely proud of our financial achievements in FY2023, with a total revenue of RM270.2 million and a significant profit after tax. These results not only reflect our strong market position but also our ability to navigate the complexities of the global e-commerce landscape effectively. Looking ahead, we are excited about our growth prospects. Our strategic investments in expanding our B2C segment, enhancing our online presence, and entering new markets are set to further solidify our standing in the industry. We remain committed to leveraging our strengths to capitalize on the vast opportunities within the global furniture e-commerce market."

Executive Director of Synergy House, Mr. Teh Yee Luen added, "The declaration of a second interim dividend of 0.6 cent per share, following the 1 cent dividend paid earlier this year, reflects our commitment to shareholder value. Our performance this year, especially the B2C segment's growth, is a testament to our strategic initiatives. While we continue to expand to more e-commerce platforms and new countries, we have started using information technology and artificial intelligence to further support the growth of the B2C segment. The Group is utilising information technology to analyse big data on customer purchase habits, market trends, advertisement patterns, amongst others and this increased the efficiency and accuracy in operating in the B2C segment. Looking ahead, we're exploring more on artificial intelligence usage for even greater efficiency. We're excited about the future and our ongoing efforts to expand our product range and enhance customer engagement."

As at 27 February 2024, the share price of Synergy House is RM0.865, representing a market capitalisation of RM432.5 million; notably, RHB Investment Bank has initiated a “BUY” coverage on the Group at 15 January 2024, with a target price of RM1.08.