Novena eyes $500m turnover in 5 years

Expansion includes increasing stake in metal recycler Green World

By Vince Chong
Jan 14, 2004
The Business Times

FURNITURE retailer Novena Holdings deputy chairman and chief executive officer Toh Soon Huat has set a turnover target of $500 million for the group over the next five years through strategic expansion and diversification.

This has begun with the group taking stakes in Hong Kong-listed Heng Fung Holdings, as well as its latest 5.2 per cent buy into Sesdaq-listed Green World, bringing Novena's total stake in the metal recycler to 9.7 per cent.

Sesdaq-listed Novena said yesterday in a statement that it paid about $1.9 million for its total stake of 6.4 million shares, which includes three million shares placed out last year. Novena wasn't obliged to release this information then as it fell below the required minimum stake of 5 per cent.

Speaking mainly in Mandarin, Mr Toh told BT yesterday: 'In a few years, I want people to think of not just furniture retailing when they see the name Novena, but rather, a corporate group with different arms of business investments.'

He declined to reveal which businesses are being considered for investment or whether Novena will continue to buy up Green World shares. Mr Toh said there are plans to expand its current core businesses in the next two years, without elaborating further.

Apart from selling furniture, where Novena has a market share of above 5 per cent, the group also retails mass market cosmetics, which account for about a third of turnover.

For the six months ended June 2003, Novena posted net profit of $685,000, up from $208,000 a year ago, while sales grew 74 per cent to $31.4 million.

Explaining his aim to expand into other trades, Mr Toh said: 'Take Green World for example: you and I may walk past a lump of waste steel and not think twice about it but people like those at Green World will have all sorts of imaginative ideas about it. So there's a lot of potential out there.'

Green World shares finished half a cent down at 32 cents yesterday.

Novena also has a 5.1 per cent stake in Hong Kong's Heng Fung, whose businesses include investment holding, property investment and development, financial and securities investment, and credit card trade.

Heng Fung - which has shown an appetite for taking stakes in Singapore companies linked to furniture or interior design - also has a 10 per cent stake in Novena.

Novena stock finished half a cent up at 34.5 cents yesterday.