Financial Performance Overview: A Mixed Bag

The fourth quarter of Fiscal Year 2025 (Q4 FY2025) presents a complex picture for JHB. While revenue saw a notable decline compared to the same period last year, the company managed to significantly narrow its losses, driven by strategic initiatives and one-off gains.

Quarterly Performance (Q4 FY2025 vs Q4 FY2024)

Revenue for Q4 FY2025 dropped by 61% compared to the corresponding quarter last year, reflecting intense competition and a global economic slowdown. However, a significant positive is the turnaround in gross profit, moving from a loss of RM1.616 million to a profit of RM0.488 million. This indicates better cost management or a shift in product mix. Consequently, the net loss for the quarter narrowed by 38%, a commendable improvement despite the top-line contraction.

Year-to-Date Performance (FY2025 YTD vs FY2024 YTD)

For the full financial year 2025, revenue decreased by 37%. While the gross loss widened by 111%, the overall loss before tax narrowed by 32%, and the net loss after tax also narrowed by 32%. This narrowing of losses at the bottom line was primarily supported by one-off gains, including the disposal of a subsidiary (Jadi Imaging Technologies Sdn. Bhd. for RM180,000, resulting in a gain of RM4.705 million), year-end adjustments, and the derecognition of right-of-use assets related to factory relocation. Additionally, a higher impairment loss on plant and machinery recorded in the previous year contributed to the comparative improvement.

Comparison with Immediate Preceding Quarter (Q4 FY2025 vs Q3 FY2025)

Compared to the immediate preceding quarter, Q4 FY2025 saw a remarkable 141% surge in sales revenue, primarily attributed to the introduction of a new range of consumer electronics with higher profit margins. This also led to a significant improvement in gross profit, turning a substantial loss into a positive figure. However, the overall loss before taxation widened from RM5.543 million to RM10.040 million. This suggests that while the core business improved, other expenses or one-off charges in the current quarter impacted the bottom line negatively.

Balance Sheet and Cash Flow: A Strategic Rebalancing

JHB’s balance sheet reflects significant changes, indicative of its strategic restructuring. Total assets decreased from RM96.140 million in March 2024 to RM47.876 million in March 2025, largely due to the disposal of property, plant and equipment, and the reclassification of assets held for sale. Total equity also saw a reduction from RM71.009 million to RM46.883 million, primarily due to the reduction of share capital and realization of revaluation reserve.

Key Balance Sheet Figures

Cash Flow Highlights

Despite the losses, JHB’s cash position at the end of the quarter improved significantly. Net cash used in operating activities for the year-to-date was RM15.925 million, an increase from RM4.704 million in the previous year. Investing activities used RM16.947 million, reflecting investments in quoted shares (RM34.608 million) and property, plant, and equipment, offset by proceeds from asset disposals. Crucially, financing activities generated a substantial RM49.021 million, primarily from drawdown of loans (RM45.340 million) and private placement (RM6.620 million). This resulted in a positive net change in cash and cash equivalents of RM16.149 million, bringing the cash and cash equivalents balance to RM8.078 million at quarter-end, a significant improvement from a negative balance last year.

Strategic Outlook and Challenges Ahead

JHB is clearly undergoing a significant strategic pivot. The disposal of its wholly-owned subsidiary, Jadi Imaging Technologies Sdn. Bhd. (JIT), signals a move away from its traditional imaging business. The management is now cautiously optimistic about its general merchandising and trading business segment, with a focus on organic growth.

Prospects

Challenges and Risks

Despite the strategic pivot, JHB faces considerable challenges:

• Intense Competition: The report highlights ongoing intense competition across its markets.
• Global Economic Slowdown: This macro factor continues to impact demand and overall business conditions.
• High Overheads & Inventory Management: The widening gross loss for the full year suggests that high overheads and inventory write-downs due to weak demand remain concerns.
• Sustained Losses: While losses have narrowed, the company is still operating at a significant net loss, which needs to be addressed for long-term sustainability.
• Execution Risk: The success of the strategic pivot into new business segments heavily relies on effective execution and market acceptance of new product lines.

The reallocation of unutilized proceeds from private placements towards the purchase and installation of an ERP system indicates a commitment to improving operational efficiency and supporting the growth of its new business segments. This digital transformation is crucial for scaling operations effectively.