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Tuesday, November 20, 2007

Plenitude expects boost from growth corridors

Property developer Plenitude Bhd said its net profit could rise by a tenth in fiscal 2008, boosted by continuous activity from three growth corridors.

Revenue should increase by about six per cent, a top official said.

For the year to June 30 this year, the group made a net profit of RM56.6 million, an 8.2 per cent rise. Revenue was higher by 7.7 per cent to RM238.2 million.

"The robust performance of the group is mainly due to positive contribution from progressive development projects, especially in Taman Desa Tebrau in Johor, Taman Putra Prima, Selangor and Bandar Perdana, Kedah," executive chairman Elsie Chua said at a media briefing in Kuala Lumpur yesterday.

So far, the group is developing some 768ha in the Northern Corridor Economic Region, Central Region of Klang Valley and the Iskandar Development Region (IDR).

Of this, some 86 per cent will be used to develop mixed-residential areas and the rest for commercial property. In addition, Plenitude has 780ha of undeveloped land.

As at June 30 this year, the company was sitting on an unbilled sales of RM150 million.

About 57.6 per cent comes from the IDR township development and 30.8 per cent from its high-end development in Sri Hartamas.

The Taman Desa Tebrau, within IDR, is Plenitude's flagship project spanning some 387.2ha in land area with a total gross development value of RM1.9 billion. This is expected to sustain the group's growth until 2018.

In July this year, Plenitude sold almost 14.8ha to Permodalan Eramaju Sdn Bhd for RM64.5 million, for the development of the country's second Ikea store located in the Tebrau City.

Plenitude made a net gain of about RM24 million from the sale.

In its research note, OSK Research has recommended that investors buy Plenitude shares. It gave a target price of RM5.

It added that Plenitude is trading at a big discount to its net tangible asset share of RM3.84.

Plenitude closed down two sen from RM2.95 last Friday to RM2.93 yesterday.

By New Straits Times (By Zurinna Raja Adam)

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