Greetings, fellow investors and market enthusiasts! Today, we’re diving deep into the latest financial performance of Sorento Capital Berhad (SORENTO CAPITAL), a prominent Malaysian player in the bathroom and kitchen sanitary ware solutions market. The company has just released its unaudited interim financial report for the fourth quarter and full financial year ended 30 June 2025 (FY25), and there’s certainly a lot to unpack.
This report highlights a period of significant growth and strategic execution for Sorento Capital, especially as it marks their fourth interim financial report following their successful listing on the ACE Market. The company has not only achieved record-high revenue and solid net profit for the full year but has also announced a dividend, reflecting a commitment to shareholder returns. Let’s explore the key figures that paint this encouraging picture and what they mean for the company’s future.
Core Financial Highlights: A Year of Robust Growth
Sorento Capital delivered an impressive performance for the full financial year ended 30 June 2025, showcasing strong growth across key financial metrics. Comparing FY25 against the previous financial year (FY24), the company demonstrated notable expansion.
FY25 Performance
Revenue: RM179.2 million
Net Profit: RM26.2 million
Adjusted Net Profit (excl. IPO expenses): RM29.3 million
Basic Earnings Per Share: 3.67 sen
Compared to FY24
Revenue: RM151.5 million (+18.3%)
Net Profit: RM24.4 million (+7.4%)
Adjusted Net Profit (excl. IPO expenses): N/A
Basic Earnings Per Share: N/A
The 18.3% increase in full-year revenue to RM179.2 million was primarily fuelled by stronger contributions from both its dealer sales channel and project-based sales. The net profit also saw a healthy rise of 7.4% to RM26.2 million. It’s worth noting that if we adjust for the one-off IPO listing expenses of approximately RM3.1 million incurred in FY25, the adjusted net profit would have been even higher at RM29.3 million, giving a clearer picture of the operational profitability.
Quarterly Momentum: 4QFY25 Shines
The fourth quarter (4QFY25) results also reflected strong upward momentum, demonstrating a commendable improvement over the immediate preceding quarter (3QFY25). This shows that the company is ending its financial year on a high note.
4QFY25 Performance
Revenue: RM43.29 million
Gross Profit: RM19.64 million
Profit Before Tax (PBT): RM10.79 million
Profit After Tax (PAT): RM7.90 million
Net Profit Margin: 18.2%
Basic Earnings Per Share: 1.10 sen
Compared to 3QFY25
Revenue: RM41.13 million (+5.26%)
Gross Profit: RM18.44 million (+6.50%)
Profit Before Tax (PBT): RM8.09 million (+33.41%)
Profit After Tax (PAT): RM6.31 million (+25.07%)
Net Profit Margin: N/A
Basic Earnings Per Share: N/A
Revenue for 4QFY25 rose by 5.26% to RM43.29 million, driven by stronger sales momentum, improved project activities, market demand, and continuous promotional marketing campaigns. Gross profit increased by 6.50% to RM19.64 million, supported by better cost control. Most impressively, Profit Before Tax (PBT) surged by 33.41% to RM10.79 million, and Profit After Tax (PAT) climbed by 25.07% to RM7.90 million. This strong quarterly performance highlights effective management and operational efficiency.
Revenue Channels: Diversified Growth
Sorento Capital’s revenue growth for FY25 was broadly supported across its primary sales channels:
- Dealer Sales: Remaining the largest contributor at 65.9% of total revenue, this channel grew by 20.8% year-on-year to RM118.1 million from RM97.8 million in FY24.
- Project-Based Sales: Contributing 33.3% of total revenue, this segment saw a 12.2% increase year-on-year to RM59.6 million compared to RM53.1 million in FY24.
- Online Channels: This segment more than doubled, reaching RM1.5 million, up from RM0.6 million a year ago, indicating successful digital outreach.
Solid Financial Footing: Balance Sheet & Cash Flow
The company maintains a healthy financial position, which is crucial for sustainable growth. As at 30 June 2025, Sorento Capital demonstrated strong liquidity and a manageable debt profile.
As at 30 June 2025
Total Assets: RM195.82 million
Total Equity: RM143.14 million
Net Assets Per Share: RM0.17
Cash and Cash Equivalents: RM33.1 million
Total Loans and Borrowings: RM6.0 million
Net Operating Cash Inflow (FY25): RM17.7 million
Compared to 30 June 2024
Total Assets: RM142.12 million
Total Equity: RM65.73 million
Net Assets Per Share: RM0.08
Cash and Cash Equivalents: N/A
Total Loans and Borrowings: N/A
Net Operating Cash Inflow (FY25): N/A
The increase in net assets per share from RM0.08 to RM0.17 reflects the growth in the company’s equity base. With RM33.1 million in cash and cash equivalents and total loans and borrowings of just RM6.0 million, Sorento Capital boasts a solid net cash position and a low gearing profile. This financial prudence provides ample flexibility for future strategic growth initiatives.
Utilisation of IPO Proceeds
Sorento Capital successfully raised RM57.4 million from its Initial Public Offering (IPO) on 28 October 2024. As at 30 June 2025, the utilisation of these proceeds is progressing as planned:
| Proposed Utilisation | Proposed (RM’000) | Actual Utilisation (RM’000) | Balance Unutilised (RM’000) | Estimated Timeframe for Utilisation |
|---|---|---|---|---|
| Branding and promotional marketing | 6,000 | 1,086 | 4,914 | Within 36 months |
| Expansion of dealer network and enhancement of distribution reach | 6,000 | 1,425 | 4,575 | Within 36 months |
| Repayment of bank borrowings | 9,000 | 9,000 | – | Within 12 months (Fully Utilised) |
| Working capital for purchase of inventories | 31,350 | 31,350 | – | Within 24 months (Fully Utilised) |
| Estimated listing expenses | 5,000 | 5,000 | – | Within one month (Fully Utilised) |
| Total | 57,350 | 47,861 | 9,489 |
The full utilisation of funds for bank borrowings, working capital, and listing expenses demonstrates efficient deployment of capital in line with their IPO objectives.
Risks and Prospects: Navigating the Future Landscape
Looking ahead, Sorento Capital anticipates continued market momentum, especially in the fourth quarter of 2025, driven by year-end commercial fit-outs, increasing construction and renovation activities, and rising demand during festive seasons. The growing awareness of hygiene and sustainability is also expected to boost consumer spending on home improvements and interior designs.
Furthermore, the recent Overnight Policy Rate (OPR) cut by Bank Negara Malaysia to 2.75% in July 2025 is a positive development, likely to stimulate consumer spending and housing demand, thereby benefiting the industry. The long-term trends of urbanisation, evolving consumer lifestyles, and government-led infrastructure and residential development initiatives further support a favourable outlook for Malaysia’s bathroom and kitchen sanitary ware sector.
However, the journey is not without its challenges. Sorento Capital acknowledges ongoing industry hurdles such as intense competition from low-cost imports, currency volatility, and the persistent increase in raw material costs. Despite these headwinds, the company remains optimistic and well-positioned to capitalise on market demand growth. Their strategy includes a strong focus on innovation, sustainability, and operational efficiency to strengthen market presence and deliver long-term value. A key initiative is the planned rollout of a new line of plumbing valves, targeting a largely untapped and unbranded market segment, which is expected to broaden their product range and capture a greater share of the market.
Summary and Investment Recommendations
Sorento Capital Berhad’s FY25 and 4QFY25 results reflect a company in a growth phase, backed by solid operational performance and a healthy financial position. The record revenue, significant profit growth (even more so when adjusted for IPO expenses), and strong cash flow are clear indicators of their market resilience and strategic effectiveness. The consistent dividend declaration further underscores their commitment to shareholder value.
While the overall outlook is positive, driven by supportive market trends and strategic expansion, potential investors should remain mindful of industry-specific challenges. The company’s proactive strategies, such as product innovation and cost control, are crucial for navigating these headwinds.
Key points to watch include:
- The company’s ability to maintain sales momentum amidst competition from low-cost imports.
- The impact of currency fluctuations and raw material costs on future margins.
- The success of their new product line (plumbing valves) in capturing new market segments.
- Continued efficient utilisation of IPO proceeds to fuel strategic initiatives.
From a professional standpoint, Sorento Capital appears to be building a strong foundation post-IPO, demonstrating its ability to grow revenue and profit while managing its financial health prudently. The emphasis on innovation and market expansion is a positive sign for sustained growth.
What are your thoughts on Sorento Capital’s latest performance? Do you believe the company can maintain this impressive growth momentum in the coming years, especially with its new product ventures? Share your insights in the comment section below!
