TGL’s FY2025 Wrap-Up: Navigating Headwinds with Strategic Focus
Greetings, fellow investors! Today, we’re diving into the latest financial report from TEO GUAN LEE CORPORATION BHD (TGL), a familiar name in Malaysia’s apparel sector. The company has just released its unaudited results for the fourth quarter and the full financial year ended 30 June 2025. This report offers a comprehensive look at TGL’s performance, highlighting both the challenges faced and the strategic moves made to sustain profitability.
While the recent fourth quarter presented some significant hurdles, TGL managed to conclude its financial year with an increase in profit after taxation, driven by a crucial accounting adjustment. This report also brings good news for shareholders with a proposed dividend. Let’s break down the numbers and understand what this means for TGL’s journey ahead.
Core Data Highlights: A Mixed Performance
TGL’s financial journey in the past year reflects a market grappling with economic shifts and evolving consumer behaviour. Here’s a closer look at the key figures, comparing the recent quarter and the full year to their respective preceding periods.
Fourth Quarter (Q4 FY2025) Performance: A Challenging Period
The quarter ended 30 June 2025 saw TGL facing a notable slowdown. Revenue experienced a significant dip, primarily influenced by the timing of festive sales.
Q4 FY2025
Revenue: RM 17.677 million
Profit Before Taxation (PBT): RM (2.003 million) (Loss)
Profit After Taxation (PAT): RM 1.718 million
Basic Earnings Per Share: 1.96 sen
Q4 FY2024
Revenue: RM 31.692 million
Profit Before Taxation (PBT): RM 2.129 million (Profit)
Profit After Taxation (PAT): RM 2.379 million
Basic Earnings Per Share: 2.80 sen
The company’s revenue for the quarter decreased by a substantial 44.22% compared to the same period last year. This sharp decline was attributed to Hari Raya sales shifting into the third quarter of the current year (March 2025), whereas last year, Hari Raya fell in the fourth quarter (April 2024).
Consequently, TGL reported a loss before taxation of RM2.003 million, a 194.08% drop from a profit of RM2.129 million in Q4 FY2024. However, thanks to the recognition of a deferred tax asset amounting to RM3.360 million, the Group still managed to record a profit after taxation of RM1.718 million for the quarter.
Full Financial Year (FY2025) Performance: Sustaining Profitability
Despite a tough quarter, TGL’s full-year performance showed resilience, largely due to careful financial management and the aforementioned tax asset.
FY2025 Year-to-Date
Revenue: RM 130.709 million
Profit Before Taxation (PBT): RM 9.733 million
Profit After Taxation (PAT): RM 11.141 million
Basic Earnings Per Share: 12.98 sen
FY2024 Year-to-Date
Revenue: RM 133.251 million
Profit Before Taxation (PBT): RM 13.594 million
Profit After Taxation (PAT): RM 10.768 million
Basic Earnings Per Share: 12.80 sen
For the entire financial year ended 30 June 2025, TGL’s revenue saw a slight decrease of 1.91% to RM130.709 million, primarily due to weakening market demand. This led to a 28.40% decline in profit before taxation, settling at RM9.733 million.
However, the narrative shifts when looking at profit after taxation. Bolstered by the recognition of deferred tax assets, TGL achieved a profit after taxation of RM11.141 million, an increase of 3.46% compared to the previous financial year. This highlights the impact of effective tax planning on the company’s bottom line.
Comparison with Immediate Preceding Quarter (Q3 FY2025)
When comparing Q4 FY2025 to the immediate preceding quarter (Q3 FY2025), the impact of the festive season shift becomes even clearer:
Q4 FY2025
Revenue: RM 17.677 million
Profit Before Taxation (PBT): RM (2.003 million) (Loss)
Q3 FY2025
Revenue: RM 62.941 million
Profit Before Taxation (PBT): RM 8.592 million (Profit)
Revenue decreased by a substantial 72% from Q3 FY2025, leading to a 123% decline in profit before taxation. This was mainly due to the two major festive periods (Chinese New Year and Hari Raya) occurring in Q3 FY2025, which saw boosted sales.
Financial Health: Balance Sheet & Cash Flow
TGL’s balance sheet as of 30 June 2025 shows a strengthening financial position:
| Item | 30 June 2025 (RM’000) | 30 June 2024 (RM’000) | Change (RM’000) |
|---|---|---|---|
| Total Assets | 146,461 | 143,088 | +3,373 |
| Total Equity | 126,517 | 120,158 | +6,359 |
| Total Liabilities | 19,944 | 22,930 | -2,986 |
| Net Assets Per Share | RM1.44 | RM1.42 | +RM0.02 |
The increase in total assets and equity, alongside a reduction in total liabilities, indicates a more robust financial structure. A significant improvement was seen in cash flow from operating activities, which swung from a negative RM10.247 million in FY2024 to a positive RM21.317 million in FY2025, reflecting better working capital management.
The Road Ahead: Challenges and Strategic Focus
Looking forward, TGL acknowledges the challenging landscape ahead, especially within the retail sector. As a company primarily involved in the wholesale and retail of garments, its performance is closely tied to consumer confidence and the overall Malaysian economy.
Economic Headwinds
The report highlights several factors expected to weigh on the retail environment:
- Anticipated Economic Slowdown: This could dampen overall consumer spending.
- Persistent Inflation and Rising Food Prices: These factors will likely squeeze disposable incomes, particularly impacting discretionary categories like apparel.
- Seasonal Demand: While festive seasons typically boost sales, the shifting timing, as seen in Q4, can create volatility.
These trends suggest a cautious outlook for the industry, where competition for consumer ringgit will remain fierce.
Management’s Strategy
Despite these headwinds, TGL’s management remains committed to improving operational performance. They are implementing strategic initiatives focused on:
- Cost Control: Tightly managing expenditures to protect profit margins.
- Optimising Efficiency: Enhancing internal processes to get more done with fewer resources.
- Streamlining Operations: Making operations leaner and more agile to respond quickly to market changes.
These efforts are crucial for mitigating the impact of economic challenges and maintaining a competitive edge in a demanding market.
Summary and Outlook
TGL’s latest financial report paints a picture of a company navigating a complex economic environment. While the fourth quarter faced significant revenue challenges and a loss before taxation, the full financial year saw a modest increase in profit after taxation, primarily boosted by the recognition of deferred tax assets. This demonstrates a strategic approach to managing financial outcomes.
Key takeaways include:
- The shift in Hari Raya sales timing significantly impacted Q4 FY2025 revenue and quarterly profitability.
- Despite a slight dip in full-year revenue, TGL achieved a 3.46% increase in full-year Profit After Taxation, mainly due to a deferred tax asset recognition.
- The company’s balance sheet strengthened, with higher equity and lower liabilities.
- Cash flow from operations saw a strong positive swing, indicating improved operational efficiency.
- A proposed final single-tier dividend of 5 sen per ordinary share reflects a commitment to shareholder returns.
Looking ahead, the retail sector, and by extension TGL, will contend with an anticipated economic slowdown, persistent inflation, and fluctuating consumer confidence. However, TGL’s management is proactively addressing these challenges through focused strategies on cost control, efficiency, and operational streamlining. The company aims to build on its solid financial foundation and adapt to market dynamics, ensuring sustained value creation.
Overall, TGL’s report signals a period of strategic consolidation and efficiency improvements, rather than aggressive growth, in the face of macro-economic pressures. The proposed dividend is a positive sign for shareholders, reflecting the company’s commitment to returning value.
What are your thoughts on TGL’s strategy to navigate these tough economic waters? Do you believe their focus on internal efficiency will be enough to counter the broader market challenges? Share your insights in the comments below!
