KUALA LUMPUR: Malaysia Aica Bhd (Maica) expects “exponential” growth in both revenue and earnings over the next three to five years, driven by expansion in its property development, said executive chairman Datuk Ter Leong Yap.
He said future land acquisitions will be partly financed via a proposed rights issue and share placement amounting to RM356 million, which will be completed by the third quarter of this year.
“The next three to five years will be crucial for us as I am targeting the group to grow exponentially with our focus on the Klang Valley, followed by Nusajaya [Johor] and Penang,” Ter told reporters after the group extraordinary general meeting (EGM) on Monday.
“At present, our landbank stands at some 500 acres (202.3ha). Future land acquisitions will be injected into the listed entity as I want to nurture the business that I have just acquired. Through this injection, I expect it to contribute positively to the group’s earnings,” said Ter, who currently owns a 50.12% stake in Maica.
In October last year, Maica inked two agreements with Cangkat Nusantara Sdn Bhd (CNSB), a related company of privately-owned property developer, Sunsuria Development Sdn Bhd, on land and asset acquisitions for a combined RM56 million to be settled via RM42 million in cash and an issuance of 28 million new Maica shares. This led to CNSB owning a 17.68% stake in Maica, a wood products manufacturer. Ter is a major shareholder of CNSB.
The acquisition included a commercial development, Trivo Suria Jelutong, in Bukit Jelutong, Shah Alam, Selangor and an adjacent piece of land, measuring 1.43ha.
Ter is reportedly expected to inject the remaining three plots of land owned by Sunsuria Development located in strategic areas. They are 21 acres in Setia Alam, 82 acres in Medini and 300 acres surrounding the Xiamen University campus in Salak Tinggi, Sepang in Selangor. After being fully developed, these three land parcels will have an estimated gross development value of RM5.9 billion.
Ter said group revenue for the current financial year ending March 31, 2015 (FY15) will be mainly driven by its Trivo Suria Jelutong project.
“Our project in Bukit Jelutong, which is halfway in progress, is expected to contribute about RM12 million in profit, of which we have already realised about RM3 million. Within this year, we expect to have a profit realisation of another RM8 million,” he said, adding that the group’s current unbilled sales stand at RM40 million.
Though the group has expertise in high-rise property development, Ter said the strategy now is on the landed and midstream property segment.
“We do have the expertise to venture into high-rise property, but that is not our focus in the near short term. Our strategy for the next one to two years is on landed property and midstream property business,” he said.
Earlier at the EGM, shareholders approved the group’s proposal to change its name to Sunsuria Bhd.
Going forward, Ter said he has set “high key performance indicators” for the management and himself. He plans to achieve RM1 billion in property sales in the next two years and eventually transform Maica into a large developer.
For FY14, Maica posted a net profit of RM3.56 million from RM989,000, while revenue doubled to RM38.08 million from RM18.5 million a year ago.
This article first appeared in The Edge Financial Daily, on May 14, 2014.
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