GLOMAC ... Sep10

Property developer Glomac Bhd has a pipeline of projects worth RM2.5 billion for launching, of which at least RM621 million is planned for the current financial year ending April 30, 201.

The planned and potential launches (such new projects as the RM250 million Glomac Al Batha Mutiara and the RM400 million Glomac Utama (in FY11), which are both currently planned for FY12), on top of an already huge pool of unbilled sales, may help push up Glomac’s revenue for the current financial year and next, to reverse a dip in revenue in FY10. Its unbilled sales had hit a record of RM588 million as at April 30, 2010, compared to its FY10 (FY ends April 30) revenue of RM316.8 million.

Armed with cash balances of RM154.2 million and a net gearing of only 11.5%, Glomac is ready to undertake more developments and land acquisitions when opportunities arise. For instance, it is seeking to acquire new landbank in Cyberjaya and has several new projects in the pipeline.

During FY10, the group acquired two pieces of adjoining leasehold land measuring 7.62 acres (3ha) in Petaling Jaya for RM31.2 million or about RM94 per square foot. The land, strategically located adjacent to Bandar Utama, is targeted for mixed residential and commercial development branded as “Glomac Utama”, with an estimated gross development value (GDV) of RM400 million.

Meanwhile, Glomac Al Batha Mutiara, which is to be built on a 1.3-acre freehold land in Mutiara Damansara, has been redesigned as serviced apartments, from mixed commercial development previously, to cater to the likely shortage of apartment or condominium space for professionals in the area. Te project will have an estimated GDV of RM250 million.

Another new project is Plaza Kelana Jaya Phase 4, which is to be sited on a 3.2-acre freehold land adjacent to Plaza Kelana Jaya and its signature lakeside promenade.

The properties consist of an office block, shopping mall and office suites, with an estimated total GDV of RM280 million. While this project is scheduled for launch in FY12, Glomac also is currently exploring potential en-bloc sale of the project in its entirety.

In FY10, Glomac registered a 28% increase in net profit to RM40.85 million from RM31.98 million in the previous FY. This was aided by a higher gross margin, which climbed to 30% from 23% in FY09.

Revenue had however dropped 8% y-o-y to RM316.76 million in FY10 from RM345.27 million previously. This was in line with the decline in the total value of local real estate transactions, which fell 8% to RM81 billion in the calendar year 2009 from RM88.3 billion in the previous year.

Glomac’s basic earnings per share (EPS) climbed to 14.15 sen in FY10 from 11.37 sen, while net assets per share also rose to RM1.88 from RM1.85.