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Tuesday, 17 January 2017

(The Star) Only World falls on temporary closure of outlets

KUALA LUMPUR : Shares of Only World Group Holdings Bhd (OWG) fell to a four-month low following the disclosure that 14 of its outlets will be temporarily closed to make way for renovations.
The stock fell to an intraday low of RM2.01 upon closing time compared to its Friday closing price of RM2.29. Turnover was at 8.6 million shares.
The sell-off was an immediate reaction to the planned closure of 14 outlets in First World Hotel, Genting Highlands.
The closures, which will begin from Feb 12, are for the ongoing redevelopment and transformation of Resorts World Genting.
The stores comprise of food service, family attraction and retail outlets.
In a filing to the exchange last week, OWG disclosed that despite the closure, the landlord will endeavour to earmark any suitable space opportunities for relocation of the affected outlets in newer areas of Resorts World.
“The closure of the affected outlets will not have any operational impact on the other outlets of the company and its subsidiaries but may have a financial impact to the group as the affected outlets contributed approximately 39% and 59% to the total revenue and profit before taxation of the group for the financial year ended June 30, 2016 (FY16) respectively,” it announced.
For reference, OWG reported revenue of RM97.97mil and pretax profits of RM17.7mil for FY16.
Its net profit for the year amounted to RM12.6mil.
OWG are primarily involved in the theme park and food and beverage businesses. Its main revenue sources are from outlets in Genting Highlands as well as the recently rejuvenated Komtar tower complex in Penang which now offers various themed attractions and family entertainment outlets.
Despite the closure, OWG remarked that the financial impact would be mitigated by the opening of two new food service outlets at Sky Avenue, Resorts World and the launch of the TOP at Komtar Tower, Penang which consist of nine food service outlets, 14 family attractions and five retail outlets. Both were launched in December last year.

The group added that it was also in the midst of finalising the terms of the tenancy agreement with the landlord for the opening of food service outlets at Genting Premium Outlets in Resorts World Genting.