S P Setia on track to meet RM5b sales in FY14

KUALA LUMPUR: S P Setia Bhd is on track to meet its RM5 billion sales target for financial year 2014 ending October (FY14), despite the challenging conditions the property market faces this year, said acting president and chief executive officer Datuk Voon Tin Yow (pic).

For the first seven months of  FY14, the property developer has already clocked up total sales of RM3.2 billion or 64% of its full-year target.

“The group’s prospects remain positive going forward as we have unbilled sales of RM11.2 million that will contribute to earnings over the next few years,” Voon said in a statement yesterday.

However, the strong sales are not reflected in its quarterly financials. For its second quarter (2Q) ended April 30, net profit came in at RM74.27 million, down 21% from the previous year. This was on the back of higher revenue at RM952.35 million against RM753.73 million in 2QFY13.

On a six-month basis, net profit was lower at RM171.05 million compared with RM187.41 million a year ago. Revenue grew 12% to RM1.67 billion from RM1.49 billion the year before.

S P Setia attributed the decrease in net profit to the distribution of profit to non-controlling interests and the recognition of the financial impact of the goods and services tax (GST) and long-term incentive plan (LTIP) expense.

“Excluding the GST financial impact and LTIP expense, the profit attributable to shareholders in the current quarter increased by 14.3% for the reasons mentioned above,” it said in a filing with Bursa Malaysia yesterday.

In a separate filing, S P Setia said it will sell its 153,000 shares or 51% stake in S P Setia Security Services Sdn Bhd (SPSSS) to non-executive chairman Tun Zaki Azmi for RM278,000. Upon completion of the deal, SPSSS will cease to be a subsidiary of the company.

The transaction will raise Zaki’s stake in the company from his present 19% to a controlling 70%.

“The provision of security management services is not part of the core activities of S P Setia Group. The proposed disposal will allow the management to focus more resources on the company’s core business, that is property development,” it said, adding that proceeds from the disposal will be used for working capital.


This article first appeared in The Edge Financial Daily, on June 12, 2014.