KUALA LUMPUR: Hai-O Enterprise Bhd expects positive contribution from its new warehouse in the year ending April 30, 2009, said group managing director Tan Kai Hee.
“We're investing RM5mil initially in the construction, which is anticipated to complete next year,” he said.
Hai-O has proposed to buy 28 acres in Klang from Bata (M) Sdn Bhd for RM45mil as part of its expansion. The company plans to use about 16.5 acres to build a new warehouse, which will give it an additional floor space of 100,000 sq feet, as well as new offices.
The remaining landbank, together with the existing Bata buildings, would be leased back to Bata for a yearly rental of some RM2.5mil, which translated into an annual yield of 6%, Tan said after the signing of a land purchase agreement between Hai-O and Bata yesterday.
The leasing contract would be renewed every three years and up to nine years, he said. The proposed acquisition, to be funded internally, is expected to be completed in May.
Hai-O has a strong balance sheet with about RM50mil in its war chest. Tan said if the company needed more funds in the future, it would consider raising this through a private placement of up to 10% of its share capital.
Yesterday, the company's shares jumped 20 sen, or 6.5%, to RM3.26 following the sterling second quarter results it released on Tuesday.
In the first six months, net profit surged 88% to RM16.2mil against RM8.5mil in the same period a year earlier while sales rose to RM139.8mil from RM81.2mil before. EPS grew to 24.08 sen from 12.96 sen previously.