PETALING JAYA: Property developer Keladi Maju Bhd expects its revenue and net profit growth in the financial year ending Jan 31, 2016 (FY16) to be flat compared with FY15, despite a surge in earnings for the first quarter of FY16 ended April 30, 2015 (1QFY16).
This is because its two major new developments — a residential development in Taman Puteri in Kulim with an estimated RM240 million in gross development value (GDV) and a mixed development in Jalan Segambut, Kuala Lumpur, worth an estimated RM2 billion in GDV — are only expected to be completed next year.
Keladi Maju managing director Datuk Chuah Chin Ah said Taman Puteri, which is a continuation of its Taman Lagenda development in Padang Serai, Kulim, and the group’s development in Jalan Segambut are expected to be completed next year.
“Both these developments will contribute to FY17 earnings,” he told reporters after the company’s annual general meeting (AGM) yesterday.
The company’s residential developments in Kulim, such as Taman Lagenda, with a 100% take-up rate, and Taman Desa Cinta Sayang, had contributed to a threefold growth in revenue and profit in 1QFY16.
The company’s net profit leaped three times to RM8.79 million in 1QFY16 from RM2.92 million in 1QFY15, while revenue ballooned to RM24.7 million from RM7.93 million, on improved sales and construction progress billings from its property development division.
In FY15, Keladi Maju (fundamental: 1.65; valuation: 2.4) recorded a net profit of RM18.53 million, down 13.65% year-on-year (y-o-y) from RM21.46 million, while revenue was at RM52.55 million, down 11% y-o-y from RM58.85 million.
Keladi Maju’s core business of property development contributes 93% to total group revenue.
Chuah said the company expects to withstand the soft property market by leveraging on its affordable developments.
“We are not significantly affected by the strict guidelines on bank loans because there is good demand for our projects in Kulim due to the affordability of the units,” he added.
Meanwhile, the group hopes to obtain the development order (DO) by the end of this year for its Jalan Segambut project, which will be on nine parcels of contiguous land and will feature a serviced apartment and retail space. The proposed development marks its maiden foray into the Klang Valley property market.
“We will be submitting the application for the DO soon,” he said.
He added that the company is looking to expand its land bank, and is especially looking at opportunities in the Klang Valley.
Keladi Maju closed half sen lower at RM29 sen yesterday for a market value of RM219.9 million.
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This article first appeared in The Edge Financial Daily, on June 26, 2015.