UOA Development expects FY15 revenue growth to be flat

KUALA LUMPUR: UOA Development Bhd expects revenue growth to be flat for the financial year ending Dec 31, 2015 (FY15), even with the launch of several mixed development projects collectively worth RM2.4 billion in gross development value (GDV) in the Klang Valley.

“We have quite a few projects in advance [stages of development], so the recognition of the revenue will be quite fast. The (revenue) outlook will be stable, close to what we had last year,” UOA general manager Eugene Lee said after the company’s annual general meeting yesterday. He said the company booked RM1.7 billion worth of sales last year with launches of projects close to RM3 billion in GDV. It expects sales to dip this year, amid the softer property market.

Lee said RM2.4 billion GDV worth of projects will be launched in the second half of 2015 (2H15) and that the focus will be on affordability, with units to be priced between RM600,000 and RM700,000.

He said the company’s main project this year will be a mixed integrated development on 10 acres (4.04ha) of land in Kepong, which has a GDV of RM1.5 billion. The project will be launched in the 2H15 and will be accessible via the Duta-Ulu Kelang Expressway extensions.

In addition, UOA will launch another mixed development in Setapak in the fourth quarter of this year (4Q15), with a GDV of RM230 million. The land it will be built on was bought for RM23 million.

Also to be launched are: Suria @ North Kiara with a GDV of RM120 million, and its Desa Business Suite with a GDV of RM300 million.

“We have two business towers in Taman Desa called Desa Business Suites. We have started construction. The government announced the high-speed rail project and our building overlooks one [proposed] station. We are exploring how best to launch and price the project,” he said.

Meanwhile, the company’s Sentul Village phase 1, launched last year, is expected to gain from the mass rapid transit Line 2 which will go through the Sentul area. The take-up rate has exceeded 90% now. Lee said UOA is looking to launch phase 2 next year.

UOA’s land bank is now at 120 acres, with an approximate GDV of RM24 billion, and it is not looking to expand this for now as it feels this should be enough to keep it busy for the next 10 years, said Lee.

UOA is looking to develop two pieces of freehold land measuring 30 acres on Jalan Ipoh into an integrated project like Bangsar South, with a GDV of at least RM6 billion.

Lee said 60% of UOA’s 60 acres in Bangsar South is still undeveloped. UOA’s net profit for the first quater FY15 ended March 31 rose 76% to RM78.48 million or 5.48 sen per share on progressive recognition of the group’s on-going development projects.

This article first appeared in The Edge Financial Daily, on May 28, 2015.