Good times ahead for SKP

by **Cals** Mon 21 Sep 2015, 04:45

Good times ahead for SKP

Saturday, 19 September 2015
By: S PUSPADEVI

Bright days are ahead for SKP Resources Bhd, as the company is set to see an earnings expansion with RM5bil worth of contracts being clinched from Dyson Ltd to produce its popular cordless vacuum cleaner.
Amid the challenging climate, SKP grabbed the first RM2bil contract in May, valued at RM400mil annually and subsequently secured another RM3bil job valued at RM600mil per annum. The tenure for both contracts are five years.
“This is a feather in our cap, as we are seen as Dyson’s core strategic partner in producing the cordless vacuum cleaner.
“And the latest contract marks another milestone for SKP and is expected to contribute significantly to the company’s annual revenue for five years, beginning 2016,” executive director Ivan Gan (pic) told StarBizWeek in an interview recently.
SKP has been working with Dyson for the past 13 years, of which the first six years it was involved in complete assembly works for the British-based company’s upright vacuum cleaners, hand dryers and bladeless fans.
Ivan says with the job wins, SKP’s revenue is expected to grow from RM600mil now to about RM1.3bil for financial year 2016 (FY16), with net margins of about 7% to 7.5%.
It grew 50% in FY15 from RM400mil to RM600mil.
The 40-year-old Gan attributes the contract wins to Dyson’s expansion plan in increasing its digital motors. The digital motors are one of the many components in the cordless vacuum cleaners.
“We have started production for the first job this month, while the second job is expected to begin in January 2016,” says Gan.