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Friday, February 26, 2016

S P Setia sets RM4b target

KUALA LUMPUR: Property developer S P Setia Bhd has set a sales target of RM4bil for this year, hoping to at least match last year’s performance despite tougher market conditions.

The company has projected 80% of its sales to come from the domestic market, with an ongoing development in Australia to contribute the rest.

“We can maintain last year’s sales target as demand for affordable housing is still strong,” acting president and chief executive officer Datuk Khor Chap Jen told a press conference on the company’s financial results for the financial year ended Dec 31, 2015 (FY15).

Khor said the company was expecting 80% of sales this year to come from the Klang Valley, Johor and Penang, where the bulk of its projects are, and the remaining 20% to come from its development in Melbourne, Australia.

Local projects which contributed to the profit and revenue achieved included Setia Alam and Setia Eco-Park in Shah Alam, Setia EcoHill in Semenyih, Aeropod in Kota Kinabalu and Brook Residences and Setia V Residences in Penang, while the overseas projects were 18 Woodsville and Eco Sanctuary in Singapore and Fulton Lane in Melbourne, Australia.

S P Setia has acquired a third parcel of land measuring 2,074 sq m in Melbourne for A$6.68mil.

“With an estimated gross development value of A$34mil, the growth opportunity remains strong and we continue to be on the lookout for further land banking opportunities in Australia,” Khor said, adding that the group was also looking out for land in the Klang Valley, Johor and Penang.

Demand for affordable housing in Malaysia is still strong, according to Khor. However, buyers of mid-range housing have difficulty securing loans.

Khor urged the Government to relax lending guidelines so as to enable genuine homebuyers to secure housing loans.

As for buyers of high-end housing, he believed their interest would be restored once they saw “good products by S P Setia”.

Asked about how the Government’s ruling to limit purchase of homes priced RM300,000 and below to first-time homebuyers had impacted S P Setia’s numbers, Khor said it didn’t affect the group as that price range was more for homebuyers in smaller states.

Meanwhile, the property developer’s targeted launch of RM2bil worth of high-end properties in Templer Park in Selayang has been delayed from last year to mid-2016.

Khor attributed the delay to “technical issues and time needed to suss out clubmembers’ concerns”.

For FY15, the group achieved a net profit of RM918mil on a revenue of RM6.7bil.

S P Setia attributed the performance to group strategy to launch mid-range and underserved products, boosted by the company’s “40th Anniversary” and “Jet Set with Setia” campaigns, which rewarded loyal customers with attractive and affordable promotion packages.

Unbilled sales at that period stood at RM9.2bil, which, delivered over the next few years would provide the group with good profit visibility.

The group has declared a single-tier final dividend of 19 sen per share, which is subject to shareholders’ approval at its upcoming AGM.

S P Setia, which derived a third of its sales from overseas, registered total sales of RM4.3bil over a 14-month period ended Dec 31, 2015.

Two-thirds of its overall sales performance in that period came from the local market, while the balance came from international sales, of which RM1.2bil was from the Battersea Power Station development in London in the UK.

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