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Monday, April 29, 2013

Will Silver Bird fly again? (Star)

 SHAH ALAM: Despite its financial troubles, Silver Bird Group Bhd expects to break even operationally in about six months, said chairman Datuk Dr Gan Khuan Poh.

“Our first priority is to break even so we can cover our costs, which would allow us to be a going concern,” he told the press after the company's AGM last Friday, its second since financial irregularities worth millions of ringgit were discovered in its books last year.

“First we did the firefighting. Now we've put the fire out.”

Gan added that Malaysia's No. 2 bread and confectionary maker by market share was in the midst of creating a new line of bread products to be unveiled soon, and is even looking at expanding in Singapore, a market he said had not been managed well previously.

“We think it can be profitable. But we are tight on funds. We have no bank facilities. They have all been frozen. Once the restructuring is done, we will have the cash to expand.”

The Singapore operations made some RM22.26mil in revenue last year, up 5% over 2011. Silver Bird's domestic business remains its core market, raking in RM107.57mil in turnover for the year ended Oct 31, 2012.

According to its recently released annual report, the firm stated that it had conducted a reassessment of its operations, following which cost cutting measures have been taken, and wastages identified and mitigated.

“Conservation of cash has been given priority with the aim of heading towards operational cash breakeven as the group is without bank financing while the regularisation proposal is pending Bursa Malaysia's approval.

“During the year, the group has reorganised the sales team, re-examined sales routes and outlets to streamline and improve the sales and cost efficiency as well as cut wastages.

“Several new consumer food products have also been developed and are set to be launched as soon as funds are available,” Gan said in the chairman's statement.

The loss-making baked goods manufacturer has been mired in controversy after it failed to deliver its annual audited accounts for 2011 due to concerns raised by its then auditor, leading to the dismissal of its founder and managing director, an executive director and general manager, as well as RM125mil in legal suits against multiple parties.

A forensic review of its accounts was also carried out, which found, among other things, evidence of destroyed documents in some 15 bags, as well as deleted files and physical damage to the computer hard drive.

Gan and four other directors subsequently took over the reigns from former boss Datuk Jackson Tan.

When queried by shareholders about the sustainability of the business, Gan expressed confidence that Silver Bird would pull through.

“We have survived for the past 15 months. The market is there. We just have to go through a restructuring,” he explained.

He added that a study had been conducted to ascertain that the business, which generates between RM150,000 and RM200,000 in cash daily, is still viable, and a turnaround possible.

While there was talk of a white knight for the firm, Gan brushed this aside, saying such parties were usually keen on fire sales.

Silver Bird, which has been without a head since Tan's departure, is still on the lookout for a managing director, although Gan said prospective candidates were asking for the sky.

“Turnaround experts can come here asking for a lot of money, but who's to say they can deliver? People tell me I don't have bakery experience, and they are right.

“We must rely on our staff and empower them. We actually hired someone to manage the restructuring, but he resigned in six months because he couldn't meet the targets.”


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