Glomac plans RM1.2 bil worth of launches for FY17

KUALA LUMPUR (June 16): Property developer Glomac Bhd, whose latest quarterly profit has fallen 26% according to its bourse filing yesterday, is planning RM1.22 billion worth of new landed and high-rise residential projects for the financial year ending April 30, 2017 (FY17).

In a statement, it said it is looking at launching new phases of mostly terrace houses throughout the Klang Valley and Johor, as well as upscale products such as semi-detached units in Saujana KLIA.

The group saw RM450 million new sales in FY16 against a backdrop of softer market conditions and the decision to hold back launches in the year.

As at end-April 2016, its unbilled sales were at RM652 million, which it expects to improve, boosted by robust launches in FY17, as it capitalises on the demand for landed residential properties in its township developments.

“Glomac’s development portfolio has a potential GDV (gross development value) of RM7 billion, dominated substantially by landed residential and township development projects,” it added.

Meanwhile, its net profit fell 26% to RM21.9 million, or 3.04 sen per share in its fourth quarter ended April 30, 2016 (4QFY16), from RM29.6 million, or 4.11 sen per share a year ago, mainly due to provisions made for foreseeable losses and liquidated and ascertained damages (LAD) totalling RM31.7 million in the current quarter.

Revenue, however, came in 1.32% higher at RM171.7 million, compared to RM169.4 million in the same period last year, mainly on contributions from the steady construction progress of Saujana KLIA, Reflection Residences (Mutiara Damansara), Puchong Lakeside Residences, and Glomac Centro in Bandar Utama, Glomac told Bursa Malaysia.

It also proposed a single-tier final dividend of two sen per ordinary share in respect of financial year ended April 30, 2016 (FY16).

For the full FY16, Glomac’s net profit slid 7.8% to RM80.2 million or 11.17 sen per share as compared to RM87 million or 12.01 sen per share in FY15, even though revenue for FY16 grew 26.5% to RM599 million from RM473.2 million last year.

“Decrease in year-to-date profit attributable to owners also resulted from lower fair value recognition for investment properties of RM10 million compared to RM30.2 million in the previous year,” it said.

Moving ahead, the group said FY17 has started on a positive note with the proposed disposal of its 16.91ha Ulu Langat land in Selangor, for RM145.6 million, expected to be completed soon.

Though it held the view that the environment going forward will continue to be challenging, it expects its performance for FY17 to be favourable with its unbilled sales and planned launches.

Glomac closed half sen or 0.66% lower at 75.5 sen, for a market capitalisation of RM550 million.

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This article first appeared in The Edge Financial Daily, on June 16, 2016. Subscribe to The Edge Financial Daily here.