GSB expects to turn profitable in FY20

KUALA LUMPUR (Dec 23): Property developer GSB Group Bhd, which has been loss-making for the last six consecutive years, expects to turn profitable in the current financial year ending March 31, 2020 (FY20), driven by sales contribution from its three ongoing property projects.

Speaking to reporters after its extraordinary general meeting (EGM) here today, GSB executive chairman Datin Toh Siew Chuon said the group's strategy is to continue to focus on residential property development. However, should there be any opportunity to go into other types of development, GSB will explore it.

Toh is one of the company's three major shareholders, with the other two being her husband Datuk Tee Eng Ho, who is also the chairman of Kerjaya Prospek Group Bhd, and his brother Tee Eng Seng, who is GSB's executive director.

The group's three main ongoing projects — all asset injections from the main shareholders — are Bloomsvale (a mixed development project at Jalan Puchong/Jalan Klang Lama in Kuala Lumpur), Straits Residence (a 30-storey serviced apartment and commercial tower in Seri Tanjung Pinang, Penang) and Kaleidoscope (four 25-storey condominium blocks in Setiawangsa, Kuala Lumpur) — with a cumulative remaining gross development value (GDV) of RM1.74 billion.

Together with the group's two other existing projects, the total GDV stands at RM2.1 billion. This, Toh said, will keep the group busy until 2024.

"We are very positive with all our projects," said Toh, adding, however, that the property market remains challenging going forward.

Toh declined to reveal GSB target sales for the year, saying "there is no proper guidance at this point of time".

She disclosed, however, that Tower A of the Bloomsvale project is 40% sold, while Straits Residence and Kaleidoscope projects are 30% and 93% sold respectively.

Historically, the group has been recording some RM20 million sales annually, excluding the assets that were injected.

GSB's net loss, which stood at RM1.81 million in FY14, rose thereafter to reach RM2.21 million in FY19. For the cumulative six months ended Sept 30, 2019, the group posted a net profit of RM1.35 million, versus a net loss of RM2.22 million a year earlier, while revenue was down 6% to RM24.23 million from RM25.87 million.

According to GSB's circular to shareholders issued ahead of the EGM, the group has a total landbank of 220,749 sq m. Of this, only 30% of the landbank has been used.

Asked if the controlling shareholder, which is also the major shareholder of Kerjaya Prospek, would consider merging the two groups, Toh said they have no such plan at the moment.

"The intent is to have two separate distinct businesses whereby Kerjaya will continue with just construction and GSB will continue to focus on property development. We want to make sure that there is no overlapping of strategies," said Toh.

On dividend payouts, Toh said GSB has yet to declare any at this juncture. "We are planning to use our funds to expand our core business first before announcing any plans for future dividend payouts. All shareholders, including us, will like to have dividends, but we will only announce or declare dividend payouts after the company has settled down," she added.

Shares of GSB closed up 1.5 sen or 8.57% at 19 sen, valuing the group at RM104.96 million.

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