Innature new business

InNature Berhad's new business venture into the food and beverage (F&B) industry with the acquisition of Blu Restaurant Sdn Bhd, the operator of Burger & Lobster restaurants, is a strategic move to diversify its business and generate additional revenue streams. 1. **Diversification Strategy**: InNature, which is primarily engaged in the retailing of cosmetic and personal care products, aims to diversify its business to include F&B services and related activities. This diversification is expected to provide the company with an additional channel of revenue, contributing immediate revenue and profit upon completion of the acquisition. 2. **Immediate Access to Resources**: The acquisition of Blu Restaurant Sdn Bhd will give InNature immediate access to the resources of Blu Restaurant, including the expertise of the existing management team, manpower, and equipment. This will facilitate the expansion of the F&B business segment. 3. **Expansion Plans**: InNature plans to expand the F&B business by setting up new Burger & Lobster restaurant outlets in Malaysia, Indonesia, and Vietnam in accordance with the development agreement. This expansion is expected to contribute to the growth of the F&B Business segment. 4. **Financial Implications**: The acquisition is valued at approximately eight times Blu Restaurant's 2023 net profit of about RM2.55 million. InNature will pay RM14.6 million for the acquisition using proceeds from its 2020 initial public offering and the remainder with internally-generated cash. This suggests that the company is committed to financing the acquisition and supporting the growth of the F&B business. InNature's new business in the F&B industry, while promising, also comes with risks. The company's financial performance in the past quarters has been under pressure, with declining EPS and revenue. The success of the Burger & Lobster franchise acquisition and the company's ability to manage the expansion plans will be critical factors in determining the impact of this new business on InNature's overall financial performance.