Despite a strong recovery in the tourism sector, carpet and furniture maker TCM Corporation Plc (TCMC) expects revenue to remain stagnant in 2023 due to the unfavourable global economic outlook.
Chief executive Piyaporn Phanachet said TCM Surface, the firm's floor covering and acoustic solutions business, had seen a substantial recovery, with its revenue in the first quarter this year climbing near to the level recorded before the pandemic.
"This recovery aligned with the overall rebound in the global tourism industry," she said. "The key driver was hotel carpets, which continued to grow. The major markets were Thailand, the US, and Asia, representing growth of 38%, 32% and 25%, respectively."
Revenue from TCM Surface showed a consecutive improvement, rising from 305 million baht in the first quarter of 2021 to 384 million baht in the first quarter of 2022, then reaching 518 million baht in the first quarter of 2023.
In the first quarter of 2020, revenue declined to 466 million baht from 680 million baht recorded in the first quarter of 2019.
TCM Surface contributed 26% to TCMC's total revenue, while TCM Living, the firm's luxury furniture business in the UK, contributed 64%. The remaining 10% is attributed to other business.
"We expect flat revenue growth in 2023 as the global situation is uncertain," said Ms Piyaporn. "However, we will focus on profit rather than driving sales this year."
In the first quarter of 2023, TCMC recorded around 2 billion baht in revenue, down from 2.4 billion baht in the same period last year.
The decline was mainly due to a drop in revenue from TCM Living, which fell from 1.8 billion baht in the first quarter of 2022 to 1.28 billion in this year's first quarter.
She said the revenue reported for the first quarter followed a normal trend and was consistent with the firm's projections as revenue in the first quarter of 2022 was inflated by revenue carried over from the fourth quarter of 2021, related to shipping issues during the pandemic.
"Consumers in the UK were hesitant about spending because of high inflation and the high cost of living," said Ms Piyaporn. "The pressure on wages intensified as a result of a skilled labour shortage after Brexit, which prevented the return of workers from Eastern Europe."
To ease the labour shortage, the firm developed an academy at its factory to train and improve skilled labourers, she said.
"In Thailand, a minimum wage hike would affect our business, even though we do not pay the minimum wage," said Ms Piyaporn. "It would ultimately result in upward pressure on wages at other levels."
