SP Setia targets RM4bil sales in FY17

KUALA LUMPUR: SP Setia Bhd achieved a net profit of RM424.8mil, or 15 sen earnings per share (EPS) in the fourth quarter ended Dec 31, 2016, bringing its total earnings in FY16 to RM808.03mil, or 29.82 sen EPS.

Its revenue in the fourth quarter stood at RM1.77bil and the full financial year ended Dec 31, 2016 (FY16) revenue at RM4.95bil. Its earnings per share for the year

SP Setia declared a final dividend of 16 sen per share, subjected to shareholders’ approval. If approved, the full year dividends payout will be 20 sen per share which includes the interim dividend of 4 sen per share totalling to RM569.3mil. This represents a dividend payout ratio of 70.5% of profit attributable to shareholders.

“We are setting a sales target of RM4bil for FY17, of which 77% is expected to come from the local projects. We are convinced that the underlying demand is still strong  and  we will  be  launching  many  exciting  and  innovative  campaigns  to  reach  out  to  the  property purchasers,” president and CEO Datuk Khor Chap Jen said in a statement.

The developer posted total sales of RM3.82bil for FY16, exceeding its revised sales target of RM3.5bil.

Local  projects  contributed  RM3.5bil representing 92% of the total sales and the remaining 8% was derived from the group’s international projects. Central region contributed the most with RM2.64bil whereas the Southern, Northern and Eastern regions contributed RM859.7mil. The group recorded its strongest sales performance in the fourth quarter of the year in review totalling RM1.78bil.

“We are very pleased with the sales achievement as it not only demonstrates the versatility of the group but it shows the strength of Team Setia in coming together to overcome the challenges in a soft property market,” Khor said.

SP Setia said the recent success of securing the long-term lease contract for 500,000 square feet of office space in Battersea Power Station by Apple Inc will enhance and increase the value of the iconic project while re-enforcing our vision of making Battersea Power Station the most sought after place-making development in London.

In addition, two out of the 12 blocks of the development’s Phase 1 units have been completed and handed over in stages to the purchasers since December with the remaining blocks to be completed and handed over by second quarter of FY17.

The group is planning to launch two new projects in Melbourne, namely on the newly acquired sites in Prahran and Exhibition Street while continuing to lookout for new land banking opportunities as the management is convinced that the growth opportunity remains strong Down Under.

Parque, Setia’s second development in Melbourne was successfully completed and handed over to its purchasers in November 2016 and had contributed to the revenue and profit achieved for the year in review.

“Moving forward for 2017, the group will continue to adopt the strategy of launching more mid-priced landed properties and affordable housing to cater to the proven strong demand for these product types at established townships. It will be selective in rolling out properties under the 10:90 scheme.

“The group targets to launch the final tower (Tower B) of Setia Sky Seputeh, a luxury condominium development in Seputeh, Kuala Lumpur as well as the transit-oriented development of
TRIO apartments at Bukit Tinggi, Klang,” SP Setia said, adding that the group would continue to search for more strategic land bank to replenish the existing acreage.

Unbilled sales stands at RM8.25bil, with 30 ongoing projects and an effective remaining land bank of 5,218 acres with a GDV of RM76.48bil as of Dec 31, 2016.