01 Jun 2020
VGI Sailed through COVID-19 in 2019/20, recording an all-time high revenue of THB 4,000mn and net profit of THB 1,424mn, seeing 117.5% growth in the Digital Services Segment
VGI PLC, the market leader in Offline-to-Online(“O2O”) Solutions across Advertising, Payment and Logistic platforms, one againdelivered an outstanding performance for FY 2019/20 which ended on 31 March2020, despite the COVID-19 crisis, achieving a revenue and all-time high netprofit of THB 4,000mn and THB 1,424mn, respectively. Meanwhile, its newest data-drivendigital market arm – VGI Digital Lab – excelled in the first year, surpassing its revenue goal, andhelping to drive growth in the Digital services segment by 117.5% YoY; in turnpushing the Company’s net profit margin to 35.6%.
Nelson Leung, CEO of VGI, said,“Following the status change of Master Ad Public Company Limited (“MACO”) froma subsidiary to an associate company, effective as of 30 January 2020, we havedeconsolidated MACO from our financial performance. Therefore, part of our2018/19 Outdoor media revenue, directly managed by MACO, and revenue fromTrans.Ad Group, recognised under our Digital services segment, have beenrestated from our profit and loss statement. Going forward, we will only recognise share of profit(loss) from our investment in MACO.”
Our Advertising segment saw itsrevenue decline 7.6% YoY to THB 2,848mn, accounting for 71.2% of the Company’stotal revenue. This was mainly due to renovation work on our digital mediascreens on BTS stations, and reduce advertising demand. Moreover, the COVID-19pandemic, which began in early 2020, has affected the entire media industry ascompanies have taken measures to reduce cost by cutting their advertisingspending. Nonetheless, our Digital services segment saw a remarkable growth of117.5% YoY, recording a revenue of THB 1,151mn, which made up 28.8% of ourtotal revenue. Overall, our growth was mainly driven by the revenue recognitionof VGI Digital Lab, a comprehensive online media agency that utilises ourGroup’s Data Management Platform (DMP) to create online/digital marketingcampaigns. Within its first year of operation, VGI Digital Lab, was able to delivera strong performance, exceeding its revenue target set at THB 150mn. Moreover,the group was able to make solid gains thanks to the strong organic growth ofbusinesses operated by the Rabbit Group.
Key Developments and ManagementOutlook
In Advertising, VGI has established a newonline agency – VGI Digital Lab – focusing on offering online and digitalmarketing services. The Company also partnered with the largest onlinemarketing and data technology platform in China with the aim to help brands inthe region gain access into the lucrative Chinese outbound traveller marketthrough a comprehensive suite of digital marketing technology. Moreover, withthe acquisition in Plan B Media Public Company Limited (“PlanB”), by combiningVGI’s O2O Solutions and PlanB’s engagement marketing, we have been able tolaunch new media packages and utilise both companies along with MACO’s digitalscreens to deliver more impactful and measurable campaigns.
In Payment, we havepartnered with Thailand’s leader in consumer products – the SAHA Group – toopen Lawson 108 convenience stores on 12 BTS stations, also offering RabbitCard and Rabbit LinePay as options for cashless payments. To date, the RabbitCard and Rabbit LinePay have seen a constant growth in their user bases, withthe number of Rabbit Cards issued now reaching 13mn, and the number of Rabbit LinePayusers reaching 7.3mn.
In our Logistics segment, in collaboration with Kerry Express(Thailand) Company Limited (“Kerry”), we have launched varioussynergy products to provide new advertising solutions and deliver better userexperience, for instance through the delivery of more than 600,000 samplingproducts, attachment of over 500,000 Parcel Stickers ads on parcel boxes andwrap advertising services on 400 Kerry Express Trucks. In addition, we havelaunched Kerry parcel shops on 4 BTS stations, offering greater convenience toover a million BTS passengers.
Alas, the COVID-19 pandemic has had an unprecedented impact on people’slives and business around the world. At times such as this, our goal is to makemeaningful contributions to our staff as well as every stakeholder andcommunity. Therefore, we have put in place strict preventive measures withinour organisation from the start of the outbreak. We have also offered free media spaceto government agencies and non-profit organizations to raise awareness aboutCOVID-19 and offered our payment platform as a channel for donations to fundthe manufacturing of protective and medical equipment. Moreover, through Kerry,we have supported taxi drivers to work as delivery drivers as well as offeredfree delivery for any essential supply sent to medical staff and hospitals.
For 2020/21, although we anticipate to see negativeimpact from the COVID-19 crisis on all of our business segments, thanks toshifting consumer behaviour and demands towards online marketing and thee-commerce market, we can expect these to have positive effects across ourbusiness units. We will also strive to maintain our strong financial positionand financial stability by focusing on expenses reduction and postponing our newinvestments as well asleveraging our existing strengths.
In light of continual uncertaintysurrounding COVID-19 and the constantly evolving measures, it is difficult forus to assess the impact of the pandemic on our financial performancecomprehensively and provide a prudent financial guidance for 2020/21 at thisstage. We will follow the situation closely and will provide the guidance whenthe effects can be concretely estimated.
Despite thecrisis, our Board of Directors has approved the payment of cash dividend at THB0.016 per share from the operating results of 2H 2019/20. The payment is stillsubject to the approval of the shareholders’ meeting.
Finally, we would like to take this opportunity to extendour best wishes to everyone as we continue to battle against COVID-19. We hopethat soon Thailand will safely get through this difficult time.
For more information, please follow this link : http://vgi.listedcompany.com/misc/MDNA/20200601-vgi-mdna-fy20192020-en.pdf