Loxley Plc will undergo an overhaul of its business structure in July, leading to a significant downsizing of non-performing operations and the dissolution of nonprofitable and outdated units.
The development is designed to boost its business operations and enhance cost controls to keep up with a dynamic business environment and the rapid pace of technological and digital change, said president Suroj Lamsam.
"Loxley will make every effort to cut costs without laying off employees," he said. Loxley has about 900 workers.
Mr Suroj declined to go into detail about which businesses will be downsized or dissolved. He said only that the business unit in charge of telecom bidding projects for state enterprises will shrink because projects from TOT Plc and CAT Telecom have waned.
The PABX (private automatic branch exchange) phone business, an internal corporate network system, is another area to be downsized after seeing a continued drop-off as digitisation takes hold. The company may have to dissolve sales teams but it will keep employees in the maintenance service segment during survival mode.
"We want to see our net profit return to trending upward this year after facing declines for three consecutive years," said Mr Suroj, adding that the strategy is also aimed at maintaining 20% revenue growth this year.
Loxley reported consolidated 13.7 billion baht in 2016 revenue, an increase of 20% from 11.4 billion in 2015. Last year's gross profit margin was 14.1%, down from 16.7% in 2015.
Net profit was 172 million baht last year, down from 210 million in 2015 and 353 million in 2014.
Mr Suroj said Loxley aims to maintain its annual revenue growth of 20% in 2017, and improve its gross profit margin to 15% this year.
Founded 78 years ago, Loxley, through 30 subsidiaries and 23 associated companies, operates four core businesses: technology, which includes power and utilities, infrastructure, construction; trading, which includes consumer products and international trading; services, which includes airport and cargo security, training service; and joint ventures in optical fibre cables, lubricants and industrial coated and pre-painted steel.
Mr Suroj said revenue from bidding projects for the state enterprises sector contributed up to 70% of Loxley's revenues, with the remaining 30% stemming from the trade sector.
Loxley is holding an order backlog of 8.5 billion baht, 80% of which will be implemented within this year and the rest by 2018.
Mr Suroj said Loxley has high expectations from government projects to be auctioned in 2017 with a combined value of 11.5 billion baht.
"We target to secure 40-50% of the projects' values," he said.
Loxley has already secured state bidding projects valued at 1.8 billion baht in the first two months of this year.
Mr Suroj said the company plans to list two subsidiaries, Loxley Power System Co and L Solar One Co, on the stock exchange by 2018.
Loxley Power System operates power plants, and L Solar One runs an alternative energy business.
LOXLEY shares closed yesterday on the Stock Exchange of Thailand at 3.14 baht, up eight satang, in trade worth 17.7 million baht.