LBS Bina implements dual dividend policies

KUALA LUMPUR: Property developer LBS Bina Group Bhd has announced the implementation of dual dividend policies, encompassing a special dividend of six sen per share for the next four years.

Apart from its normal dividend policy, LBS Bina managing director Datuk Lim Hock San told a media briefing yesterday that the company has introduced a special dividend policy, which covers receipt of deferred cash payment from its disposal of assets.

Effective from the financial years ending Dec 31, 2014 to 2017, he said the company would propose a special dividend policy of six sen per share or up to 40% of each tranche received from selling assets.

The group has also declared a special tax-exempt dividend of eight sen, from the HK$500 million (RM211.8 million) received from Zhuhai Holdings Investment Group Ltd on Aug 12. The special dividend will be paid on Oct 18 this year.

"We decided to give a special dividend of eight sen for financial year 2013 after the disposal of the Chinese assets," said Lim.

On July 19, LBS Bina shareholders approved the disposal of its Chinese assets worth HK$1.65 billion, which would be settled in cash of HK$500 million and a 16.8% stake in Zhuhai Holdings worth HK$299.9 million.

The balance of HK$850 million will be paid to LBS Bina in tranches over four years, beginning next year.

It is worth noting that with 16.8%,  LBS Bina will be the second largest shareholder in the Hong Kong-listed Zhuhai Holdings.

The assets that were sold to Zhuhai Holdings comprise a piece of development land and the Lakewood Golf Club in Zhuhai, China.

As for LBS Bina's normal dividend policy, shareholders will be paid out of profit from the group's ordinary business. "That will be from our Malaysian business," said Lim.

Under this policy, there will be a minimum payout of 30% of LBS Bina's profit after taxation from FY13 onwards.

The group has declared a 2.5 sen dividend for FY12, scheduled to be paid in September this year.

Lim noted that the combined dividend of normal and special dividends of 10.5 sen translates to a yield of 5.83% based on yesterday's closing price of RM1.80, for this year.

Commenting on the joint venture agreement (JVA) with Hotel Rasa Sayang Sdn Bhd, Lim said up to 30% of the RM375 million estimated development cost will be financed from bank borrowings.

LBS Bina recently signed the JVA with Hotel Rasa Sayang for a residential development project on a 1.18-acre (0.5ha) freehold tract in Johor Baru. The development has a gross development value of RM520 million.

"The target purchasers for the development are Malaysians, Singaporeans and Chinese from China."

Sitting on 2,115 acres of undeveloped landbank, the group is planning to roll out five new projects by year-end. These are the Cameron Golden Hills in Cameron Highlands, SkyPark Tower Two in Kuala Lumpur, Bandar Putra Indah, Bandar Saujana Putra in the Klang Valley and an upcoming Kuantan project which has yet to be announced.

"LBS Bina has received several proposals on joint ventures for land acquisitions, which include land in Selangor, Kota Kinabalu, Kuantan as well as Johor," said Lim.

He said LBS Bina would also focus more on its Johor development, adding that the group is planning to build 1,416 affordable homes at its Bandar Putra Indah township in Batu Pahat, Johor.

"Out of the 1,416 units, the group is planning to roll out 612 by year-end," he said, adding that as at Aug 15, LBS Bina's total unbilled sales stood at RM714 million.

This article first appeared in The Edge Financial Daily, on August 21, 2013.



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