Kerjaya Prospek wins RM207mil contract to build houses - Business News | The Star Online


Kerjaya Prospek wins RM207mil contract to build houses

PETALING JAYA: Construction company Kerjaya Prospek Group Bhd has been awarded a RM207.36mil contract for the construction of landed properties developed by BCB Bhd .

The contract entails the construction of 166 semi-D houses and 99 bungalows on a 49-acre land located in Kota Kemuning, excluding infrastructure works.

Kerjaya Prospek executive chairman Datuk Tee Eng Ho told StarBiz that the recent contract win was the second landed property project undertaken by the group and will be reflected in the group’s financial year 2018 and 2019 (FY18 and FY19) earnings.

Construction work for the project is expected to commence on May 15, 2017 and due to be completed on Sept 30, 2019.

“This contract win comes as part of our efforts to diversify our revenue stream.

“Despite our specialisation in building high-rise developments, we are confident in maintaining our margins of a double digit net profit, with the use of the Industrialised Building System (IBS) in our construction,” said Tee.

He added that the first landed property project completed by the group was E&O’s Avira development located in Medini Iskandar, which was also constructed using the IBS system.

Construction for the Avira development was valued at a total of RM300mil for both phases of development.

The newly won contract brings Kerjaya Prospek’s orderbook replenishment for the year to RM239mil, to which Tee said the group is on track to meeting the group’s internal orderbook guidance for the year.

It is notable that the group delivered orderbook wins amounting to RM1.58bil last year.

Its total outstanding orderbook currently amounts to RM2.5bil, which will last the group until early 2020.

Looking at Kerjaya Prospek’s balance sheet as of FY16, the group has a share premium of RM330mil.

According to an analyst, it is highly possible that Kerjaya Prospek may propose a bonus issue exercise of its shares in the future.

In reference to the recent Companies Act 2016, there will no longer be a par value in shares.

This means that a company’s share premium account, authorised share capital and capital redemption reserves will be scrapped.

With the new act to be enforced in stages by the Companies Commission of Malaysia (SSM) and the dismissal of par value, companies will be encouraged to utilise the share premium account.