Developer sees flat FY15 sales, pays 9.7 sen dividend for FY14

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KUALA LUMPUR: S P Setia Bhd expects sales to be flat or slightly lower at RM4.6 billion for the financial year ending Oct 31, 2015 (FY15), after missing its sales target of RM5 billion in the just-ended fiscal year amid weaker market sentiment.

The property developer achieved sales of RM4.62 billion for FY14, of which international sales contributed RM1.8 billion and the domestic segment the remaining RM2.82 billion.

S P Setia acting president and chief executive officer Datuk Voon Tin Yow said while the group missed its FY14 sales target by “a little, it will still be getting [a] bonus”.

“The market sentiment has slowed down this year, but there is always opportunity. It’s the ability to detect what types of property that are still in demand and in what location [they are in],” he told a news conference to announce the group’s FY14 financial results yesterday. The press briefing would be Voon’s last as he will be leaving S P Setia on Dec 31, after 25 years of service in the group. “We deliberately decided not to launch [properties] aggressively in FY14 because we have done well in the previous [financial] year [FY13], achieving RM8.3 billion and as you are aware, there are people leaving [the group]. We focus on our delivery to the customers,” he added.

He said S P Setia focused on selling the unsold portion of its existing projects in FY14 and still managed to rake in RM4.62 billion in sales.

With its wide range of products and coverage of locations, Voon is confident S P Setia can achieve its sales target of RM4.6 billion set for FY15.

He expects 40% of the sales to come from overseas and the rest from Malaysia.

He said demand will come from its township projects, linked houses and mid-range products priced from RM300,000 to RM500,000.

S P Setia saw its net profit rise marginally by 1.3% to RM131.31 million for the fourth quarter ended Oct 31 (4QFY14) from RM129.64 million a year ago.

Revenue for 4QFY14 increased 27.7% to RM1.23 billion from RM965.68 million a year ago. Earnings per share (EPS) was lower at 5.19 sen compared with 5.27 sen in 4QFY13.

The group said the slower rate of increase in profit compared with the percentage increase in revenue was mainly due to a mismatch between initial expenses incurred and revenue recognition in the United Kingdom and Australia, as revenue is recognised at a point in time when the construction of the assets are completed and handed over to the customers.

“It was also due to the goods and services tax financial impact of RM6.8 million charged out in the current quarter (4QFY14) which was recognised progressively since 2QFY14,” it said in a statement.

For the full year (FY14), net profit fell 3% to RM405.68 million from RM418.35 million a year ago. This was despite revenue rising 16.8% to RM3.81 billion from RM3.26 billion.

EPS for FY14 stood at 16.3 sen compared with 17.95 sen in FY13.

S P Setia has also proposed a gross final dividend of 5.7 sen per share and an interim dividend of 4 sen per share, totalling 9.7 sen per share for FY14.


This article first appeared in The Edge Financial Daily, on December 17, 2014.