Rather than adopting the persona of a suit-wearing business executive, Richards understands what his customers desire. A two-time world champion and nine-time winner of the Rolex Sydney-Hobart Yacht Race, Richards believes his extensive experience with yachts has shaped his approach as CEO. He stays actively involved in every facet of the business, from design to production.
“I’ve been designing boats since I was 12, and it’s in my genes. I’m very fortunate that I get to utilise those qualities (given by) God within GBY. The concept of every GBY product you see is done by me,” says Richards.
Before Richards took the helm, GBY had suffered from five consecutive years of red ink and was trading at just 21 cents in March 2014, valuing the company at just below $40 million. The company also had an ill-managed production facility at Pasir Gudang, where water leaked from the roofs, and it was clear that the facility had far from ideal working conditions for production workers.
Since then, the mainboard-listed luxury yacht company has shown great recovery and healthy and robust growth. It is now an established name in the luxury yacht industry and shows no signs of slowing down.
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In its most recent results for 1HFY2025 ended Dec 31, 2024, GBY reported earnings of $7.6 million, up 9.2% y-o-y. Revenue in the same period was up 3.4% to $67.2 million. This is a stark contrast to a decade ago when GBY was operating at a gross loss margin of 5.2% with a revenue of about $38.9 million. GBY shares now trade at 62.5 cents per share as of March 18, a gain of about 81% in the past 12 months.
Full throttle towards growth
To chart a course for further growth, GBY has laid down several plans. For example, it is opening new offices to drive sales in new markets. The company is also increasing its production capacity at Pasir Gudang to build larger vessels and a larger number of them.
GBY has hinted at its facility expansion plans for several years. In July 2023, it officially announced that it would spend almost $9 million on a single-storey facility that adds 143,300 sq ft of usable floor space to the 550,000 sq ft existing facility. This brings the total floor space of the Pasir Gudang facility to about 700,000 sq ft today.
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The extended facility would house the composite manufacturing side of the business, which Richard says would “free up a lot of space” in the main production facility area to increase production efficiency and build more of the bigger model yachts, such as the Grand Bank 85 and Palm Beach 107.
“The new facility was more to increase production efficiency. We’ve outgrown the current facility which made it quite inefficient as many of the jigs to build bigger boats are huge and take up a lot of space,” says Richards.
“Space has been a real issue for us over the last two years, and it’s been a big restriction for the company, so this is going to have a very positive impact on production,” says Richards to visiting shareholders and other members of the investment community on March 11.
When The Edge Singapore visited the shipyard on Mar 11, the facility was bustling with the sound of machinery whirring and engines running with workers busy building and testing completed yachts.
In the past decade, much capital expenditure has been channelled towards improvements at Pasir Gudang. Investments in machinery, working conditions and automation seem to have paid off, creating an efficient and highly equipped facility.
With the new expansion, the Pasir Gudang facility can reduce lead times by about 15% and produce higher-margin stock boats. Stock boats—without fancy customisation—give customers the advantage of purchasing their new vessel without the long waiting time that customisation requires, which consumes additional manpower resources.
The Palm Beach GT50 Outboard Model, dubbed as GBY’s “Porsche 911”, is poised to be a good stock boat for the company’s business moving forward, adds Richards. The GT50 Outboard Model was launched in October 2024 and GBY aims to make 10 of those a year.
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Unsurprisingly, GBY’s target clientele are ultra-high-net-worth individuals. Richards claims the company has been gaining traction with this demographic in the US and will try to capture a bigger slice of this pie by further expanding its sales and service operations in the US.
In November 2024, GBY opened a new office in the prestigious Kona Kai Marina in California. GBY is also keen to establish a presence on the East Coast of the US, which Richards sees as the “last strategic puzzle piece” for now.
Richards sees this expansion into the East Coast of the US as bolstering GBY’s presence there from a service, sales, and customer experience perspective. This move is crucial for the company's target market, giving GBY a more personal sales experience with a physical presence on the East Coast. If all goes well, Richards expects this to bring in more orders and “keep the facility full at all times.”
Riding into calmer seas
Although today's equity markets are a sea of uncertainty and volatility, GBY seems well-positioned to ride out the uncertainty with minimal impact.
Being involved in a “low volume, high margins” business and being located in Malaysia, the company is rather insulated from uncertainties in the US and global markets.
Additionally, as a luxury yacht maker, the company targets the wealthy and, at times, retired clientele who tend to be less sensitive to economic downturns, unlike mass consumers who cut back on discretionary spending the moment they feel some chill.
During the pandemic, GBY experienced a surge in customer orders, driving its order book to an all-time high of approximately $191.8 million in September 2022 (1QFY2023). Richards notes that with travel restrictions in place, customers turned to pleasure sailboats as an alternative. However, production was also disrupted during this period, resulting in a backlog of orders.
Since then, GBY’s order book has declined to about $109.8 million as of 1HFY2025. However, Richards noted that the inflated pandemic numbers were “unrealistic.” He remains optimistic about the current number as it falls in line with his aim to “fill order books” instead of aiming for large order books, which causes long delivery times for customers.
“Industry-wide, everyone’s order books went through the roof [during the pandemic]. Typically, for this industry, a one-year order book is normal, and customers don’t like to wait two years for a boat, so they stop ordering boats. Today, it (GBY’s order book) is getting back to normal of about 12 to 18 months of sales ahead and that's typically what you should have,” says Richards. The time frame usually reflects how long it takes the group to build a customised boat.
Eyeing expansion
Several other yacht manufacturers are not performing as well as GBY. For instance, Massachusetts-based Boston Boatworks filed for bankruptcy protection in January. MJM Yachts, another luxury yacht builder, narrowly avoided liquidation in 2023, only to be rescued by an acquisition from private equity firm Saothair Capital Partners in August.
Expansion and innovation remain the company’s core focus across all areas. In addition to increasing capacity and developing new models to drive growth, GBY is also embracing sustainability. GBY has not only taken steps to reduce factory temperatures and improve working conditions but has also made a smart investment in developing its solar power system to fuel the manufacturing process.
“We invested in a 1,000-kilowatt solar system and we're about to put another 1,000 kilowatts in this factory, so we'll almost be virtually off the grid during the day in manufacturing hours,” says Richards. The company’s commitment to balancing sustainability with growth has also enabled it to capitalise on government grants from Malaysia, which, according to Richards, will be a “great help” financially for the firm.
While the focus is currently on growing sales in the US, the CEO is also eyeing expansion into Europe to diversify the customer base and boost new sales. “You don't have all of your eggs in one basket. We have a strategy of getting into Europe and this is a market we need to get into as well. We sell a few boats a year to Europe, not many, but we want to try and diversify our product and sales into other countries,” adds Richards.
