SP Setia sets RM5.5bil 2013 sales target

Fresh from achieving a record-breaking sales of RM4.23bil for its financial year ended Oct 31, 2012, S P Setia Bhd president and chief executive officer Tan Sri Liew Kee Sin is setting another ambitious target for 2013 RM5.5bil in total sales.

“Never bet against S P Setia. We plan everything very carefully. We have gone through a thorough process of understanding the markets that we are in. We are very confident that Team Setia will be able to do it, and next year will be another record year,” Liew said during the press conference to announce S P Setia's 2012 financial results.

Out of the RM5.5bil target, about RM3.5bil will come from Malaysia, with the remainder from its overseas market, namely United Kingdom and Australia. The contributing Malaysian projects will be KL Eco City, Setia Alam and those in Johor Baru.

While topline will increase with sales contribution from S P Setia's projects in London and Australia, the profit from these countries will only be recognised upon completion of the projects in 2016 and 2017.

Hence for those years, Liew is expecting a quantum leap in bottomline.

Both SP Setia's shares and warrants dominated the gainers list yesterday, with the warrants also being on the volumes list. S P Setia closed the day up 12 sen to RM3.15 on volume of 8.27 million shares while the warrants were up 14.5 sen to 22 sen on volume of 42.98 million shares.

S P Setia further created another record when its Sky 88 condominiums were transacted at RM1,000 per sq ft, which is a record price in Johor Baru. All 322 units of the international lots have been taken up.

S P Setia will also be undertaking the international launch of its Central London Battersea Power Station from Jan 10 onwards, starting in the United Kingdom, followed by Malaysia, Singapore, Hong Kong and the Middle East.

For phase 1, there are 800 units with the gross development value of RM4bil up for grabs, out of which 400 are allocated for Malaysians. S P Setia is targeting to sell all 800 units in six months.

“We want to create an international community, and an international centre. We cannot do that if we were to sell everything to the Malaysians. It is through an international community that we create value appreciation for our buyers,” said Liew.

S P Setia together with Sime Darby Bhd and the Employees Provident Fund are jointly developing the 39.1-acre freehold Battersea power station site in London with a projected gross development value of £8bil (RM39.4bil) comprising a mix of residential and commercial properties.

Last week, British Finance Minister George Osborne approved a £1bil (RM4.89bil) loan to support the Malaysian-backed London's Battersea Power Station to help fund an extension of London's Underground train line to the Nine Elms area on the south bank of the River Thames.

Liew said that this was a major boost for the Battersea project.

On the corporate front, S P Setia's share price has been on a downtrend for the most part of this year. This has also been contributed by its removal from the MSCI Malaysia Index in end-November. Year to date, the share price is down some 18% to RM3.15.

Liew said he was heartsick' about S P Setia's removal, but there was nothing much SP Setia could do, as its shares needed to have a 25% public trading spread to qualify staying in the index.

“On the corporate level, we are doing a placement now to increase this spread. We will address this issue step by step.

The placement is also to reduce our gearing level which is currently at 0.96 times (x). With the placement, we are looking to reduce it to 0.5x,” said Liew.

The company has proposed to issue up to 15% of its paid-up capital as new shares or a maximum 322.7 million shares to raise up more than RM1bil.

For the fourth quarter to Oct 31, 2012, revenue was up 20.57% to RM763.62mil while net profit increased by 54% to RM127.03mil. For the full financial year, SP Setia achieved an increase in revenue to RM2.53bil from RM2.23bil while net profit rose to RM393.82mil from RM327.97mil. - By TEE LIN SAY (The Star)

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