Sales_Record

Introduction Founded 30 years ago by Mr. Fong Chee Hiong, Farm's Best Berhad (Farm's Best) is a Malaysia-based company engaged in investment holding and provision of management services. It has grown itself into one of the largest integrated poultry producers in Malaysia which is currently helmed by the founder’s four sons. Farm’s Best Berhad principal activities are segregated into three main categories, namely: • Farm’s Best food products • Integrated poultry operations • Housing development The Company, through its subsidiaries, operates in two fragments: poultry, which include the manufacturing and wholesale of animal feeds, poultry breeding, hatchery operations, contract farming, poultry processing and trading of feeds, day-old chicks, medications and vaccines, and housing development, which include the development and construction of residential and commercial properties. Sinmah Livestocks Sdn. Bhd., Sinmah Multifeed Sdn. Bhd., Sinmah Egg Products Sdn. Bhd., Farm's Best Food Industries Sdn. Bhd., Sinmah Breeders Sdn. Bhd., Sinmah Ventures Sdn. Bhd., Lynbridge Sdn. Bhd. and Sinmah Development Sdn. Bhd are its direct subsidiaries and there are also an additional 16 indirect subsidiaries and four associated companies. Farms’s Best was incorporated as a private limited company on the 26 May 1994. At that moment, it was known as Iklim Sinar Sdn. Bhd. A year later, it was converted into a public company; Iklim Sinar Berhad. It went through a renamed again on the 1 December 1994 to Sinmah Resources Berhad and afterward was acknowledged to the Official List of the Second Board of Bursa Malaysia Securities on 18 May 1995. The name Farm’s Best Berhad came on board later on 11 July 2005. The transformation is relevant to their business nature and to better reflect the company’s activities and ownership. [pic] Attached above is the company’s corporate symbol. It symbolizes its nature of business, leadership integrities and qualities and the freshness of the products used. Financial Performance Table below shows the financial highlight of the company’s performance in 2009. |2009 |Poultry |Housing Development |Others |Total | |  |RM'000 |RM'000 |RM'000 |RM'000 | |Revenue |  |  |  |  | |External sales |334,182 |13,721 |0 |347,903 | |  |  |  |  |  | |Results |  |  |  |  | |Segment results |6,375 |1,386 |-735 |7,026 | |Finance income |65 |8 |0 |73 | |Finance costs |-11,347 |-419 |-818 |-12,584 | |Share of results of associates |1,313 |0 |-358 |955 | |(Loss)/profit before tax |-3,594 |975 |-1,911 |-4,530 | |Tax income/(expense) |-235 |-24 |0 |-259 | |Loss for the year |-3,829 |951 |-1,911 |-4,789 | |  |  |  |  |  | (Source: Extracted from FBB’s Annual Report 2009) In 2009, Farm’s Best Berhad’s recorded a lower loss after taxation of RM4.789 million as compared to 2008 (RM6.29 million in loss). This was due to the much lower average prices of live broilers and processed poultry products contrast to 2008. A positive report showed on their housing development progress with a profit of RM0.95million as opposed to RM0.64 million losses the year before. Analysis of the Sales Growth Rates Farm's Best Berhad Sales of Goods from 2005-2009 (figures in RM ‘000) |  |2005 |2006 |2007 |2008 |2009 | |Sales of goods net of discount |364,021 |300,341 |369,538 |392,673 |334,182 | (Source: Extracted from FBB’s Annual Report 2006-2009) Since the sales of goods’ number are fluctuating, Best Fit Line method was chosen to average out the number of goods sold. This was done for the ease of determining the y-intercept and the slope of the graph. The linear equation obtained: y = 3265.4x + 342355 General Form of Linear Equation : y = mx + c Therefore; y-intercept = 342355 slope = 3265.4x = growth rate Meaning that, the sales of goods will grow by 3265.4x + 342355 whereby x represent the number of the forecasted year. In this case, x =1 since the data is in the scale of 1 year. Description of the Sales Trend [pic] From the graph, we can conclude that the highest sales of goods is RM392.673 million in the year of 2008 while the biggest slump will be in the year of 2006 with RM300.341 million goods being sold. The sales fluctuate throughout the 5-year period mainly because of the breeding period of the farm animal which took quite some time. Apart from, due to the Influenza A (H1N1) disease which occurred first quarter of 2009, it effected the sales record of 2009. A drastic decline of RM58.491 million took place due to this epidemic. The outbreak made consumers to be more cautious with goods supplied from birds. The same pattern also occurred in between 2005 and 2006. During this period, H5N1 influeza (similar to H1N1) was highly spread across the Asian region. The sales decline was higher than 2008-2009 as during this particular period, the influenza was quite new and knowledge on the effect of consuming sources from birds was very little. Conclusion As Farm’s Best Berhad main activities are through poultry and food services, it’s predicted that such decline in sales growth will occurred again in the next 3-4 years. This will mainly due to climate changes and serious influenza. The influenza will somehow create vigilance among end user eventhough precaution steps were taken to prevent it from spreading. According to the board in 2009, Farm’s Best will be expecting the similar progress of sales in the year ending 2010 due to the slow healing from the epidemic. The company will undertake external consultants to provide advice on process of re-engineering, energy savings and cost cutting measures. Farm’s Best is determined to increase sales of the “further processed products” which will then carry higher profit margins. Apart from that, the company will be aggressively continuing to implement cost cutting strategies and to stabilize the usage for imported raw materials in order to strive 2010. [pic]