WS-SK Target posts FY26 revenue growth but slips to RM1.93 million loss on higher costs and associate impairment

WS-SK Target Group (WS-SK Target, 08427) reported its audited results for the year ended 31 May 2026, showing top-line expansion but a swing to loss driven by rising operating expenses and an impairment on an associate investment.

Financial highlights • Revenue rose 9.43 % to RM34.52 million, supported by a 10.24 % increase in sales of precast concrete junction boxes to RM32.48 million, and an 11.70 % rise in other building materials and services to RM1.97 million. • Gross profit improved 8.00 % to RM10.14 million, leaving the gross margin broadly stable at 29.37 % (FY25: 29.75 %). • Administrative expenses jumped 33.02 % to RM7.37 million, while selling and distribution costs climbed 43.89 % to RM2.67 million. • An impairment charge of RM2.14 million on an associate and a RM0.31 million share of loss from that associate weighed on earnings. • Net result moved from a FY25 profit of RM0.08 million to a FY26 loss of RM1.93 million; basic EPS turned to a loss of 11.71 RM cents (FY25: earnings of 0.51 RM cents). • No final dividend was declared.

Balance-sheet and liquidity • Cash, bank balances and short-term deposits increased to RM24.17 million (31 May 2025: RM22.73 million); pledged deposits accounted for RM1.20 million. • Current ratio moderated to 2.06 from 2.71 as current liabilities rose, including RM4.02 million of promissory notes reclassified from non-current. • The group remained debt-free in terms of bank borrowings; gearing stayed at zero. • Net assets edged down 0.59 % to RM36.49 million.

Segment performance • Manufacturing and trading remained the core contributor, delivering segment profit of RM9.62 million (FY25: RM8.76 million). • Other building materials and services generated RM0.44 million (FY25: RM0.32 million). • E-commerce activities in mainland China provided RM0.08 million revenue and RM0.07 million segment profit.

Post-year-end event On 10 July 2026, subsidiary Target Precast Industries agreed to acquire a parcel of land in Selangor, Malaysia, from Kien Heng Hong Ginseng for RM24.00 million, a transaction approved by shareholders on 12 August 2026.

Capital activities • A 10-for-1 share consolidation became effective on 6 August 2024. • Two share subscriptions completed in July 2024 and December 2025 raised combined net proceeds of HK$6.34 million (approximately RM3.34 million), fully applied toward promissory-note repayment and working capital. • As at end-FY26, 16.568 million shares were in issue.

Outlook Management maintains a “cautiously optimistic” view, citing continuing demand from Malaysian data-centre and railway projects but noting cost pressures, labour shortages and foreign-exchange volatility as key operational risks.