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MKH seeks more land

KUALA LUMPUR: Metro Kajang Holdings Bhd plans to allocate RM100 million in capital expenditure (capex) for its property development division this year, including the acquisition of new landbank.

The group currently has new and ongoing projects in Kajang, Semenyih, Bangsar, Melawati and Kuala Lumpur. These projects carry a total gross development value (GDV) of RM2.1 billion for the next five years, or RM3 billion for the next seven years.

"We favour these areas as we are fairly competent in the Klang Valley region. There is potential to acquire more landbank (in these areas) and we have the funds for it," said group executive chairman Datuk Alex Chen Kooi Chiew on Tuesday, Mar 29 after the group's annual general meeting.

Metro Kajang's prospect as a property developer is getting brighter. Kenanga Research in a report issued on Tuesday said the group could be one the key beneficiaries of the Sg Buloh-Kajang MRT line under the government's Economic Transformation Programme.

"The group has near to 420 acres of immediately developable land bank in Kajang, making it one of the largest landbank owners in the area. Since MRT stations were positioned for Kajang, property prices there have increased 35% to 50% over the last 12 months," said the research house.

Metro Kajang saw its revenue for 1QFY11 ended Dec 31, 2010 fall 45.5% to RM51.7 million from RM94.9 a year before on the back of lower contributions from its property and construction divisions.

Property and construction divisions saw a 64.7% year-on-year decline in 1QFY11 revenue to RM22.5 million from RM65.8 million for 2009, due to the completion of certain ongoing projects and the fact that newly launched projects are still at their preliminary stage of development.

Nonetheless, the group said as at Dec 31, 2010 it had locked in unbilled sales value of RM157.6 million, from which attributed sales revenue and profits will be recognised progressively as their development percentage of completion progresses.

The amount of locked in sales as at end last year was significantly higher than the sum of RM53.1 million as at Dec 31, 2009.

Metro Kajang is also looking to expand its palm oil plantation operation. The group currently owns 16,000 acres of palm oil plantation in East Kalimantan, Indonesia and is in the midst of acquiring another 20,000 acres nearby.

"We are still performing due diligence and expect it to be finalised in the next three months," said Chen.

Additionally, the group is building a new FFB (fresh fruit branches) processing factory in East Kalimantan to be completed in September.

The group previously stated that it expected its palm oil division to contribute 20% to group earnings for FY12 ending Sept 30. Plantation division posted a pre-tax loss of RM4.5 million for FY10. Shareholders attending the Metro Kajang AGM approved a change in the group's name to MKH Bhd, effective from the date of issuance of the Certification of Incorporation on change of name by the Companies Commission Malaysia.

"The proposed change of name is part of the group's rebranding exercise. The aim is to better position the group as we have businesses in Malaysia, Indonesia and China and not in Kajang alone. The new name will enhance the group's image and more accurately reflect its business operations," said Metro Kajang in its circular provided to shareholders.

Additionally, shareholders also approved the renewal of a share-buyback of the company's shares amounting to a maximum of 10% of the issued and paid-up share capital.

Metro Kajang shares gained 2 sen to close at RM1.71 on Tuesday, with 473,200 units done.

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