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Wednesday, January 24, 2018

Earnings from Encore Melaka shows can help group withstand any property downcycle — Yong Tai

Billy Toh / theedgemarkets.com
January 24, 2018 17:24 pm +08

KUALA LUMPUR (Jan 24): Yong Tai Bhd is optimistic that its first-of-its-kind theatre, Encore Melaka, will deliver consistent revenue and earnings for the group.

Chief executive officer Datuk Wira Boo Kuang Loon said the focus is to get the theatre up, which is expected to show its first production in May.

"When tourists come, we see the needs and demand. We design our property to suit that. That will make a better combination.

"With the show starting this year, we would have a consistent revenue, consistent profit. We can maintain the sustainability of the company," Boo told the media after Yong Tai's corporate briefing for analysts at the Invest Malaysia 2018 conference.

Boo expects earnings from the theatre shows to help Yong Tai withstand any property downcycle.

"There is a property cycle. That's why we don't want to be caught in this kind of dilemma. So that's why we position our property as complementary to our tourism," he said.

The shows were initially scheduled to start next month but there has been a slight delay due to immigration matters.

Boo explained that trainers from China need to apply for a professional visa pass, which requires applicants to have a degree qualification, which some musicians and dancers do not have.

Describing the delay as a minor setback, he said he is looking forward to the first show in May.

For the financial year ending June 30, 2019 (FY19), ticket sales from the theatre screenings are expected to consist of about 30% of the group's total revenue with the remaining coming from the property segment.

The projection was made on the assumption that 1 to 1.1 million tickets could be sold during the period at an average price of RM120 to RM130 each.

The group's total revenue is expected to reach RM140 million in FY19 with profit at RM60 million.

In the property segment, Yong Tai is expected to launch its U-Thant project and another phase of Impression City this year.

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