Plenitude strengthens cash position

KUALA LUMPUR: Plenitude Bhd did not raise dividend payments for its financial year ended June 30, 2014 (FY14) despite achieving higher net profit as part of a "prudent" decision to strengthen its cash position in the midst of a softening market, said its executive chairman Chua Elsie.
"This year we made more money but we gave them (shareholders) less dividend but as we were telling them, the global and regional economies are slowing down, the Goods and Services Tax (GST) is coming and oil prices are going up. You do not know what to expect next year.
"So we'd like to keep some cash in case land is cheaper than now. You never know, next year people may want to let go some land and we are trying to acquire more land," she told reporters after its AGM yesterday.
Plenitude's net dividend per share was at 6 sen for FY13 and FY14, although net profit grew 12.67% to RM87.65 million in FY14 from RM77.79 million a year ago.
Chua said it currently has 1,500 acres of land across Peninsular Malaysia, which would last the company for another 10 years. It is looking to expand its landbank in Kuala Lumpur, Selangor and especially in Penang and Johor Baru.
She said it has received many land acquisition proposals but is waiting for the opportunity to acquire more strategic land.
"That's why we need cash, for better negotiation power because most of the time when people want to let go immediately, they want cash, they don't want to wait for a loan," she added. The company currently has RM396 million cash with no borrowings.
Moving forward, the company has three launches planned in Johor Baru, Penang and Puchong, with an estimated gross development value of RM313 million in total.
"We try to maintain our financial performance but bear in mind, the market is softening. (Even though) we hope to maintain (our performance). Due to the softening, we did a lot of re-planning. We had some high-rise buildings that we planned in Johor Baru, but we scrapped that for the time being because of the trend and the demand. That's why a lot of re-planning is being done for next year," said Chua, adding that some of its launches this year were deferred to next year.
The property developer also owns two hotels, namely Four Points by Sheraton Penang and the recently acquired Gurney Resort Hotel & Residences in Georgetown, Penang.
Chua said the transaction for Gurney Resort Hotel & Residences should be finalised by January. Upon completion of the transaction process, the two hotels are expected to contribute 10% to 15% of its overall revenue.
"If another hotel comes in and the price is right, of course we will still go into that line. We also own properties for leasing. We are open to any other assets that bring in recurring income, if the proposal is at the right place and time. We are considering anything (not just hotels)," she said, adding that it wants to boost its recurring income.