PROPERTY developer Plenitude Bhd (5075) may review the planned launch of some of its property projects due to the current economic situation. Three projects with an estimated gross development value (GDV) of about RM400 million have been scheduled to be launched next year.
The company has a total of RM3.8 billion in GDV of on-going and future development projects with a bulk of it or RM3.4 billion in sum for residential projects. Executive director Tan Seng Chye said the company is closely monitoring the market demand and perception before it launches the projects. "Of course we want to go according to our plan but if the market softens, we will take appropriate action," he told reporters after the company's eighth annual general meeting in Kuala Lumpur yesterday.
The three upcoming projects are in Batu Feringgi in Penang, and Bukit Tunku and Damansara Heights in Kuala Lumpur. Tan said Plenitude has yet to feel the impact of economic downturn as "most of our current projections are near completion and their take-up rates have been strong".
"There is an indication of the market going down and I can't say how much we will be impacted or even our growth expectation for the current year," Tan said. He added that property will still be the main revenue contributor to the group and growth for the current year ending June 2009 will be derived from the sales it made in the previous years and current sales.
"We have locked in sales of RM216 million for this year," he said, adding that as far as the group's financial position is concerned, it is still very strong. Plenitude has a landbank of about 760ha that will keep it busy for the next 10 to 15 years. Tan said the company is continuing to scout for land here and abroad. "We are in a strong net cash position to acquire land and want to take the opportunity now as prices go down," he said, referring to Plenitude's net cash of more than RM136 million or RM1.01 per share as end June 2008.
For the financial year ended June 2008, Plenitude recorded a net profit of RM78.6 million and a revenue of RM347.8 million. Tan said its net profit margin is strong at 22.61 per cent when compared to other industry players, while its gearing at 1.4 per cent is relatively low against the industry's norm.
