Revenue Group Navigates Market Shifts: A Deep Dive into Their Latest Quarterly Performance
Greetings, fellow investors and market enthusiasts! Today, we’re unboxing the latest financial report from Revenue Group Berhad, a key player in Malaysia’s digital payment ecosystem. This report for the quarter and period ended 31 March 2025 presents a mixed bag of results, highlighting both strategic shifts and the impact of market challenges. While revenue figures saw a decline, the company managed to turn around its quarterly pre-tax profit, signaling resilience amidst a dynamic environment. Let’s delve into the numbers and uncover what’s truly shaping REVENUE’s journey.
Financial Performance: A Closer Look at the Numbers
REVENUE’s latest quarter, ending 31 March 2025, shows a notable shift in profitability despite a dip in top-line revenue. The strategic disposals played a crucial role in this quarter’s performance.
Quarterly Performance (Q3 FY2025 vs Q3 FY2024)
Current Quarter (Q3 FY2025)
Revenue: RM59,073,000
Gross Profit: RM5,438,000
Profit Before Tax (PBT): RM143,000
Loss After Tax: RM(334,000)
Basic Loss Per Share: (0.04) sen
Previous Corresponding Quarter (Q3 FY2024)
Revenue: RM92,219,000
Gross Profit: RM9,295,000
Loss Before Tax (LBT): RM(2,838,000)
Loss After Tax: RM(3,492,000)
Basic Loss Per Share: (0.76) sen
For the quarter, revenue decreased by RM33.13 million, or approximately 36%, compared to the same period last year. This was primarily due to a significant reduction in the Digital Payment Services segment (down RM26.43 million) stemming from supplier restrictions on sales channels, and lower contributions from the Solutions & Services segment (down RM5.43 million) following the disposal of Innov8tif Holdings.
However, the highlight of the quarter is the turnaround in profitability. The Group recorded a Profit Before Tax (PBT) of RM0.14 million, a stark improvement from the Loss Before Tax (LBT) of RM2.84 million in the previous corresponding quarter. This positive shift was largely attributed to gains from the disposal of Innov8tif Holdings, property, and right-of-use assets, totaling approximately RM5.81 million, coupled with a reduction in administrative expenses by RM2.02 million.
Period-to-Date Performance (9 Months FY2025 vs 9 Months FY2024)
Current Period-to-Date (9M FY2025)
Revenue: RM149,805,000
Gross Profit: RM13,033,000
Loss Before Tax (LBT): RM(1,923,000)
Loss After Tax: RM(2,473,000)
Basic Loss Per Share: (0.43) sen
Previous Corresponding Period-to-Date (9M FY2024)
Revenue: RM204,888,000
Gross Profit: RM19,639,000
Loss Before Tax (LBT): RM(1,698,000)
Loss After Tax: RM(2,425,000)
Basic Loss Per Share: (0.84) sen
For the nine-month period, revenue decreased by RM55.08 million, or approximately 27%, compared to the same period last year. Similar to the quarterly trend, the Digital Payment Services and Solutions & Services segments were the primary contributors to this decline. Despite the revenue challenges, the period-to-date Loss Before Tax (LBT) slightly increased to RM1.92 million from RM1.70 million. However, the overall loss was mitigated by significant gains from disposals (approximately RM7.04 million) and lower administrative expenses (RM1.78 million).
Segmental Breakdown of Revenue
Here’s how each business segment contributed to the revenue:
| Business Segment | Q3 FY2025 (RM’000) | Q3 FY2024 (RM’000) | 9M FY2025 (RM’000) | 9M FY2024 (RM’000) |
|---|---|---|---|---|
| Electronic Data Capture (EDC) Terminals | 5,874 | 6,604 | 11,415 | 12,802 |
| Electronic Transaction Processing | 2,104 | 2,681 | 4,550 | 5,642 |
| Digital Payment Services | 46,713 | 73,142 | 123,451 | 166,491 |
| Solutions and Services | 3,908 | 9,341 | 9,230 | 18,941 |
| Others | 474 | 451 | 1,159 | 1,012 |
| Total Revenue | 59,073 | 92,219 | 149,805 | 204,888 |
The Digital Payment Services segment continues to be the largest contributor, but its revenue decline significantly impacted the overall group performance. The Solutions and Services segment also saw a notable drop, partly due to the disposal of Innov8tif Holdings.
Financial Health and Cash Flow
A look at the balance sheet reveals strategic asset reconfigurations and a stronger cash position:
Cash and Bank Balances: Increased significantly to RM64,490,000 as at 31 March 2025, up from RM22,768,000 as at 30 September 2024. This substantial increase was driven by proceeds from the disposal of subsidiary companies (Innov8tif Holdings), right-of-use assets, and property.
Total Bank Borrowings: Decreased significantly to RM16,097,000 as at 31 March 2025, from RM43,207,000 as at 31 March 2024. This reduction in debt improves the company’s financial flexibility.
Net Assets Per Share: Stood at RM0.18 as at 31 March 2025, a slight decrease from RM0.20 as at 30 September 2024.
The cash flow statement reflects a healthier position, with net cash from investing activities soaring to RM65.48 million (from a net cash used of RM2.87 million last year), primarily due to the proceeds from disposals. Net cash used in operating activities also improved, indicating better operational efficiency in managing cash outflows.
Risks, Prospects, and Strategic Moves
REVENUE acknowledges the uncertainties in the global economy, particularly from ongoing trade tensions and tariffs. However, they remain optimistic about the domestic digital economy’s growth, spurred by the Malaysian Government’s continuous digital advancement initiatives.
A significant future prospect for the Group is the potential positive contribution from its online moneylending business, assuming the benefits from the recently acquired license materialize. This diversification into financial services could open new revenue streams and strengthen the Group’s overall market presence.
The Board emphasizes a cautious yet vigilant approach to managing its businesses, taking into account global factors. The strategy moving forward involves actively seeking market opportunities through business collaborations, joint ventures, or acquisitions to enhance market presence and improve product and service offerings. This proactive stance suggests a commitment to adapting and growing in a challenging landscape.
Key Corporate Proposals and Litigation
REVENUE has proposed a renounceable rights issue with warrants to raise capital, alongside a diversification into the moneylending business. These proposals are crucial for the company’s future growth and strategic direction.
Additionally, the company is involved in ongoing material litigation against former directors and another entity, alleging breaches of listing requirements and directors’ duties. This legal matter, which has seen trial dates rescheduled to September 2025, remains a point of attention for the company and its stakeholders.
Summary and Outlook
Summary and
Revenue Group Berhad’s latest quarterly report paints a picture of a company undergoing significant transformation. While traditional revenue streams faced headwinds from market competition and supplier restrictions, strategic asset disposals have bolstered cash reserves and improved the balance sheet. The turnaround in quarterly profit before tax, despite a revenue decline, highlights the impact of these strategic shifts and cost management efforts. The proposed diversification into moneylending and the rights issue with warrants are key initiatives that could redefine the company’s growth trajectory.
However, the ongoing litigation against former directors and the general market uncertainties pose potential risks that warrant careful monitoring. The company’s ability to successfully execute its diversification strategy and navigate competitive pressures will be crucial for its future performance.
Key points to consider:
- Revenue decline in core segments due to external factors and competition.
- Significant profit turnaround in the current quarter driven by one-off gains from disposals.
- Strong improvement in cash position and reduction in bank borrowings.
- Strategic push into online moneylending and proposed rights issue for future growth.
- Ongoing material litigation that may impact the company.
What are your thoughts on REVENUE’s strategic moves and its ability to capitalize on the digital economy’s growth? Do you believe the diversification into moneylending will be a game-changer for the Group? Share your insights in the comments section below!
