KUALA LUMPUR: Crest Builder Holdings Bhd is likely to reward shareholders with higher dividends this year, said its executive director Yong Tiok Keng, as the specialist construction and engineering contractor expects to post better earnings on higher property sales and higher contribution from construction business.

She said sales from its property projects have picked up, while it expects to bag one or two new construction contracts in 2015.

“With a better bottom line, we expect [to pay] better dividends this year. Our unofficial dividend payout policy is to return a minimum of 25% of the group’s net profit,” Tiok Keng told reporters after Crest Builder’s annual general meeting yesterday.

Crest Builder had declared a first and final dividend of 3.75 sen per share for the financial year ended Dec 31, 2014 (FY14), payable on July 30, 2015.

The group recorded a 57.43% decline in net profit to RM20.76 million in FY14 from RM48.77 million in FY13. Revenue was down 7.17% to RM207.39 million from RM223.4 million in FY13.  

Crest Builder executive director Eric Yong Shang Ming noted that Crest Builder has a construction tender book of some RM6 billion consisting of government and private sector projects.

“Our average tender success rate is about 10% to 20%. We are hopeful to secure one or two contracts this year,” he said, but declined to provide details on what the contracts are.

Shang Ming said the group’s current construction order book stands at RM350 million comprising three projects, and it hopes to grow its order book to RM500 million by year-end.

It is targeting an average profit margin of between 7% and 12% for its construction projects.

As for projects under the 11th Malaysia Plan, Shang Ming said the group is waiting for the tenders to be called.

He added that Crest Builder is also looking to bag infrastructure projects such as sewerage or water.   

Shang Ming also said the outlook for the construction sector is still “very bright” as he expects more activities with the rollout of the mass rapid transit Line 2 (MRT 2) and the light rail transit Line 3 (LRT 3) projects. 

As for the property market, Tiok Keng said sales have started to pick up from this month as seen by its Alam Sanjung project in Shah Alam, Selangor, which has recorded a take-up rate of 70%.

The project, with a gross development value of RM300 million, is expected to be completed in the third quarter of 2015.

Crest Builder is targeting to launch its RM320 million Residensi Hijauan condominium project, also in Shah Alam, by the end of this year. Construction work will start in August.

Crest Builder shares closed down 0.88% at RM1.13 yesterday, with a market capitalisation of RM191.65 million.

This article first appeared in The Edge Financial Daily, on June 25, 2015.