This article first appeared in The Edge Financial Daily on May 31, 2019
KUALA LUMPUR: More upbeat about the building industry’s outlook for this year compared with that of last year, construction group Kerjaya Prospek Group Bhd is targeting to secure RM1.2 billion worth of jobs for the financial year ending Dec 31, 2019 (FY19).
Executive chairman Datuk Tee Eng Ho said he is “quite confident that this year will be better”, expecting double-digit growth in sales on more job wins.
Kerjaya Prospek’s FY18 order book was at RM989.8 million. This means it is aiming for an about 20% increase in the value of jobs secured this year. Contract wins, as of end-April 2019, already amounted to RM873 million or 72.8% of its target, Tee told reporters during a briefing yesterday on the group’s first-quarter results.
The outstanding order book, meanwhile, stood at RM3.1 billion as at end-March, which would keep the group busy for three years. Tee said Kerjaya Prospek is bidding for more jobs worth RM1.5 billion.
Eyeing JVs
The group is also eyeing some joint-venture (JV) projects, mainly in the Klang Valley and on Penang island, said Tee, and that the group is seeking high-rise developments.
“A JV is a good option for the group to not exhaust our cash flow,” he said, adding the firm is building a war chest as it is seeking merger and acquisition opportunities as well.
He also provided updates, such as Kerjaya Prospek aiming to launch two high-rise projects in the second half of next year in Shah Alam and Dutamas, with an estimated gross development value of RM250 million and RM400 million respectively.
On capital expenditure, the group plans to spend RM30 million, to be funded internally, on buying equipment such as tower cranes and concrete pumps, among others.
For the first quarter ended March 31, 2019, Kerjaya Prospek’s net profit rose 8.6% to RM35.12 million from RM32.35 million a year ago as revenue grew 3.5% to RM264.18 million from RM255.14 million. As at end-March, its cash and bank balances stood at RM166.84 million.