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Friday, June 20, 2008

TA Enterprise upbeat on property division Sector is expected to account for 60% of revenue in FY09

KUALA LUMPUR: TA Enterprise Bhd expects revenue contribution from its property development division to reach 60% for the financial year ending Jan 31, 2009 (FY09) from 40% currently.

“We are looking to diversify our property business to markets in Vietnam, China and the US, as well as in countries that we have a presence in and are familiar with, such as Australia and Canada,” managing director and chief executive officer Datin Alicia Tiah told reporters after the company AGM yesterday.

Datin Alicia Tiah

However, the group was adopting a wait-and-see approach for the “right timing” as the current world property market remained lacklustre.

On its proposal to list its real estate investment trust on the Singapore Exchange, Tiah said it had been put on hold due to the softening property market in Singapore now.

Besides, the group was also considering the listing of its property arm as a separate entity in the near future, she said, noting that the stock exchange would be determined by market performance.

According to Tiah, both its overseas properties - the Radisson hotel in Sydney and a commercial building in Vancouver - provided good capital appreciation and high net yield of 8% per annum.

Moreover, she said, TA's strong net cash of RM400mil put the company in a good position for overseas expansion.

“We hope to increase overseas revenue contribution to 50% from the current 25% in three to five years,” Tiah said.

It currently has a presence in Hong Kong, Australia, Canada and South Africa.

The group has unbilled sales of RM234.7mil, of which RM21.9mil is from its current projects at Damansara Idaman and Idaman Villas in Petaling Jaya, and the remaining from the Idaman Residence project.

TA is expected to launch the final phase of Damansara Idaman in September, with the 26 luxury bungalows priced above RM4mil each.

Meanwhile, TA would launch new mixed commercial development projects in Sri Damansara, Bukit Bintang and near the KL City Centre in the near future, Tiah said, noting that it had total land bank in over 1,000 acres currently.

On the stock market's performance, Tiah said the market would remain sluggish due to the US subprime issue, local political uncertainties and rising inflation this year.

Nonetheless, TA hoped to retain at least 30% revenue contribution from the financial sector, she added.

TA registered net profit of RM224.21mil on revenue of RM546.71mil for FY08. It paid a dividend of 10 sen per share for FY08, against 7 sen per share for FY07.

“We are confident of maintaining our FY08 net profit in FY09, barring unforeseen circumstances,” Tiah said, adding that it would retain some of its property projects for recurring income.

By The Star

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