Glomac optimistic of better financial performance in FY20

23 Oct 2019 / 20:44 H.

KUALA LUMPUR: Glomac Bhd expects a better performance in the financial year ending April 30, 2020 (FY20) premised on its strong first-quarter results, unbilled sales and improved financial position of Glo Damansara, along with RM903 million of new launches in FY20.

For the first quarter ended July 31, 2019 (Q1’20), Glomac’s net profit tripled to RM3.46 million from RM1.01 million a year ago mainly due to administrative cost savings achieved, despite posting 10% lower revenue.

Unbilled sales stood at RM432 million as at July 31, 2019, supported by sales from ongoing projects such as Saujana Perdana and Plaza @Kelana Jaya. The group expects unbilled sales to be boosted by planned launches in FY20.

Speaking at a press conference after its AGM here today, Glomac group managing director and CEO Datuk Seri Fateh Iskandar Mohamed Mansor, better known as FD Iskandar, said the group is targeting to achieve sales of up to 70% of its RM903 million planned launches in FY20, equivalent to RM632.1 million. In FY19, the group achieved sales of RM323 million, driven by launches totalling RM540 million.

Glomac attained sales of RM25 million in Q1’20, mainly derived from ongoing projects.

“The upcoming launches will remain in the mid-market and affordable segments while the landed residential projects in townships such as Saujana Perdana and Saujana KLIA continue to sustain steady sales,” FD Iskandar said.

The group has proposed a final dividend of 0.8 sen per share for FY19 as it targets to return to a stronger dividend trend with sustainable recovery in earnings and cash flows.

“Let’s perform first (for FY20) but we should be better (in dividends), looking at the trend so far,” FD Iskandar said.

While the property sector is expected to remain challenging in the near term, the group remains optimistic that the strong portfolio of potential developments with a gross development value of RM8 billion puts the group in a good position to continue offering products to the mass market as conditions improve in the future.

In FY19, Glomac’s net profit dropped 56% to RM13.60 million from RM31.13 million a year ago, due to the higher base in the previous year arising from allowance for foreseeable losses on property development and write-back of accrued construction cost no longer required.

On the lowered threshold on high-rise property prices in urban areas for foreign ownership from RM1 million to RM600,000 in 2020, FD Iskandar believes the issue of developers raising prices does not arise as the new measures apply only to completed units. And these units have been around for three to five years, he said.

“If locals wanted to buy, they would have bought them. If we can get foreign buyers within this short period of time, we can free up a lot of capital and we can reinvest this into our economy and create more jobs,” he added.

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