I-Bhd adopts new dividend policy

SHAH ALAM: I-Bhd has adopted a new dividend policy. The property developer aims to pay out not less than 30% of its net profit to shareholders starting from financial year 2014 ending Dec 31 (FY14). Chief executive officer Datuk Eu Hong Chew said the goal is to make I-Bhd a strong dividend play in the market.

“We think our earnings can support the dividend policy and at the same time can generate enough cash flow for the rest of our property investments as well,” he told a press conference after the group annual general meeting (AGM) yesterday.

Eu said I-Bhd plans to launch properties worth up to RM600 million a year over the next couple of years, “so we have steady revenue generated from the property segment”.

The group is planning to double revenue from its property segment to RM180 million by the end of this year from FY13’s RM90 million.

“We expect the property segment to register double-digit [revenue] growth [per year] until we reach our target of RM500 million to RM600 million,” said Eu.

He said the group aims to increase the contribution from its property segment to account for up to 75% of  revenue in FY14 compared with last year’s 62.4%.

“The leisure segment [contribution] will drop accordingly. In five years, we are going to have RM500 million in revenue from the property development segment and RM100 million generated from the leisure segment and breach the RM1 billion mark of  our investment property portfolio,” said Eu.

Eu noted that as at last year, the investment property portfolio contributed less than 10% to group revenue.

As at March 31 this year, the group’s unbilled sales stood at RM400 million, with plans to roll out RM1.6 billion worth of properties this year, including the Grand i-Residence on Jalan Kia Peng, Kuala Lumpur, which has a gross development value (GDV) of RM860 million and the i-Suite@I-city with a GDV of RM775 million.

I-Bhd is expected to unveil a commercial block at i-Suite in i-City in Section 7, Shah Alam at the end of this year, and to launch Grand i-Residence by the end of next month. Grand i-Residence is the group’s maiden project in Kuala Lumpur, featuring a 50-storey luxury condominium block on a 1.05-acre (0.424ha) tract.

Projects to be launched in the coming years include the CentralPlaza@i-City shopping mall, the CentralTowers and the Jewel, all within i-City in Selangor.

He noted that I-Bhd will hit the next transition point in five years, at which time the recurring income segment will contribute half of group revenue. This will come from its 60%-owned shopping mall, three hotels, a number of data centres and 6,500 parking bays in i-City.

Out of the 72-acre tract in i-City, the group has used 10 acres for property development, 15 acres of land is for ongoing construction, with 20 acres earmarked for developments next year.

The stock has rallied 42.06% to a high of RM3.58 on April 28 from RM2.52 on Dec 31 last year. It closed eight sen or 2.45% higher at RM3.35 yesterday, which translates to a market capitalisation of RM356.4 million.

This article first appeared in The Edge Financial Daily, on July 1, 2014.