MATRIX (5236) -Matrix Concepts expects double-digit profit growth
April 27, 2015 : 9:56 AM MYT
SEREMBAN: Property developer Matrix Concepts Holdings Bhd expects the recurring income from its d’Tempat Country Club and the Matrix Global Schools to contribute up to 10% of its bottom line in the next three to five years, according to group managing director and chief executive officer Datuk Lee Tian Hock.
Lee, in an interview with The Edge Financial Daily, said the two properties, which have started operation this year, should already be breaking even by 2016.
“We set a target of 1,000 students for Matrix Global Schools by 2016 and we have already achieved the operational break-even of our club at 2,500 members.” Lee said.
Lee said he expects the company’s property projects in Bandar Sri Sendayan (BSS) here to flourish into a town centre similar to that of 1 Utama upon completion in seven to eight years.
The town centre named Sendayan Icon Park is expected to mirror development in 1 Utama.
“I’ve modelled Sendayan Icon Park after something like 1 Utama. 1 Utama is 100 acres (40.47ha) whereas ours is 116 acres. We’re looking to develop a shopping mall, commercial units such as shophouses, a convention centre, a hospitality hotel, residential units and a medical facility. With gradual expansion, we will see greater development,” said Lee.
He reckons that Sendayan Icon Park will become the Damansara of Seremban.
The medical facility — which will be built in BSS — will be retained by the company to generate recurring income, said Lee.
Lee added that though the company is on the lookout for property land, especially in high-growth areas in Penang, Kuala Lumpur and Sabah, it is not in a hurry to seal any deals yet.
“Prices in Sabah are now as high as in KL and that is surprising,” Lee said.
On Matrix Concepts’ earnings targets for the financial year ending December (FY15), Lee is confident the company can achieve a double-digit net profit growth despite the softer property market, which he expects to remain soft and sluggish throughout the year. Lee expects the company to be able to do this through the launch of its township development projects in BSS, Seremban, Negeri Sembilan and Taman Seri Impian in Johor.
Lee also dismissed concerns about the company being unable to maintain its high dividend payout ratio of 40% of its profits, a payout policy it instituted since its initial public offering in 2013. It declared a dividend of 35.5 sen for FY13 and 19 sen for FY14. These represent a 59.7% payout ratio for FY13 and 42.3% for FY14.
“We constantly have shareholders’ interests [at heart] and we make sure we honour what we promise them. If the results are not so good, I trust that the shareholders understand that we have tried our best,” he said.
Lee, however, said population growth in Malaysia still significantly exceeds the supply of houses in the market.
“There will always be a shortage. There is always demand and this would depend on your locality and prices. If there is affordable housing in a good locality, it will always be snatched up.”
Kenanga Investment Bank property analyst Adrian Ng said Matrix Concepts’ approach in diversifying into recurring income assets will set the company apart from its peers amid the cooling property market.
“In a market where property is soft, it is better for the company to aim for stability rather than growth. As long as it maintains its position, even at a very flat level, it will make the company stand out,” he said.
He added that he sees significant strides in value of the BSS township if it continues to garner notable names in the education space, such as KDU.
Last week, it proposed to acquire a 5.8-acre land cum approved residential development project in Puchong, Selangor, for RM95 million. Forty per cent of the cost will be settled using internal funds while the remainder will be bank borrowings.
Matrix Concepts’ net cash stood at RM96.94 million on Dec 31, 2014. In FY14, its net profit rose 20% to RM182.61 million from RM151.56 million in FY13.
Vendor IRDK Ventures Sdn Bhd has started preliminary earthworks and piling works for 318 high-rise condominium units and 28 four-storey link villas on the plot of land, which is located beside SetiaWalk.
Matrix Concepts wants to increase the density of the project to up its gross development value to more than RM500 million.
“The 318 units to be built are based on the approved density of 60 units per acre. The vendor is taking steps to increase the density to 90,” Lee said, adding that the project is due to be completed in four years.
He said some of the existing units, which range from 1,800 sq ft to 2,500 sq ft, will be split to 700 sq ft to 800 sq ft per unit.
The smaller units will make up about 40% to 50% of the project. Pricing of the entire project’s units will likely be between RM550 and RM650 psf, he said.
The company expects to complete the transaction by the third quarter of this year.
Its shares closed five sen higher at RM3.15 last Friday, which valued the company at RM1.36 billion.
http://www.theedgemarkets.com
April 27, 2015 : 9:56 AM MYT
SEREMBAN: Property developer Matrix Concepts Holdings Bhd expects the recurring income from its d’Tempat Country Club and the Matrix Global Schools to contribute up to 10% of its bottom line in the next three to five years, according to group managing director and chief executive officer Datuk Lee Tian Hock.
Lee, in an interview with The Edge Financial Daily, said the two properties, which have started operation this year, should already be breaking even by 2016.
“We set a target of 1,000 students for Matrix Global Schools by 2016 and we have already achieved the operational break-even of our club at 2,500 members.” Lee said.
Lee said he expects the company’s property projects in Bandar Sri Sendayan (BSS) here to flourish into a town centre similar to that of 1 Utama upon completion in seven to eight years.
The town centre named Sendayan Icon Park is expected to mirror development in 1 Utama.
“I’ve modelled Sendayan Icon Park after something like 1 Utama. 1 Utama is 100 acres (40.47ha) whereas ours is 116 acres. We’re looking to develop a shopping mall, commercial units such as shophouses, a convention centre, a hospitality hotel, residential units and a medical facility. With gradual expansion, we will see greater development,” said Lee.
He reckons that Sendayan Icon Park will become the Damansara of Seremban.
The medical facility — which will be built in BSS — will be retained by the company to generate recurring income, said Lee.
Lee added that though the company is on the lookout for property land, especially in high-growth areas in Penang, Kuala Lumpur and Sabah, it is not in a hurry to seal any deals yet.
“Prices in Sabah are now as high as in KL and that is surprising,” Lee said.
On Matrix Concepts’ earnings targets for the financial year ending December (FY15), Lee is confident the company can achieve a double-digit net profit growth despite the softer property market, which he expects to remain soft and sluggish throughout the year. Lee expects the company to be able to do this through the launch of its township development projects in BSS, Seremban, Negeri Sembilan and Taman Seri Impian in Johor.
Lee also dismissed concerns about the company being unable to maintain its high dividend payout ratio of 40% of its profits, a payout policy it instituted since its initial public offering in 2013. It declared a dividend of 35.5 sen for FY13 and 19 sen for FY14. These represent a 59.7% payout ratio for FY13 and 42.3% for FY14.
“We constantly have shareholders’ interests [at heart] and we make sure we honour what we promise them. If the results are not so good, I trust that the shareholders understand that we have tried our best,” he said.
Lee, however, said population growth in Malaysia still significantly exceeds the supply of houses in the market.
“There will always be a shortage. There is always demand and this would depend on your locality and prices. If there is affordable housing in a good locality, it will always be snatched up.”
Kenanga Investment Bank property analyst Adrian Ng said Matrix Concepts’ approach in diversifying into recurring income assets will set the company apart from its peers amid the cooling property market.
“In a market where property is soft, it is better for the company to aim for stability rather than growth. As long as it maintains its position, even at a very flat level, it will make the company stand out,” he said.
He added that he sees significant strides in value of the BSS township if it continues to garner notable names in the education space, such as KDU.
Last week, it proposed to acquire a 5.8-acre land cum approved residential development project in Puchong, Selangor, for RM95 million. Forty per cent of the cost will be settled using internal funds while the remainder will be bank borrowings.
Matrix Concepts’ net cash stood at RM96.94 million on Dec 31, 2014. In FY14, its net profit rose 20% to RM182.61 million from RM151.56 million in FY13.
Vendor IRDK Ventures Sdn Bhd has started preliminary earthworks and piling works for 318 high-rise condominium units and 28 four-storey link villas on the plot of land, which is located beside SetiaWalk.
Matrix Concepts wants to increase the density of the project to up its gross development value to more than RM500 million.
“The 318 units to be built are based on the approved density of 60 units per acre. The vendor is taking steps to increase the density to 90,” Lee said, adding that the project is due to be completed in four years.
He said some of the existing units, which range from 1,800 sq ft to 2,500 sq ft, will be split to 700 sq ft to 800 sq ft per unit.
The smaller units will make up about 40% to 50% of the project. Pricing of the entire project’s units will likely be between RM550 and RM650 psf, he said.
The company expects to complete the transaction by the third quarter of this year.
Its shares closed five sen higher at RM3.15 last Friday, which valued the company at RM1.36 billion.
http://www.theedgemarkets.com
