MPHB’s property ambition faces delay

KUALA LUMPUR: Multi-Purpose Holdings Bhd’s (MPHB) hopes of diversifying its property development portfolio have been delayed by the economic slowdown, which has affected some of its commercial property plans.

“There will be some delays in the property developments that we have planned, as the current market condition is not conducive for new launches,” MPHB chief operating officer (COO) Kheoh And Yeng said after the company’s AGM last week.

At the same time, MPHB is also not ready to relook at the long-delayed Mimaland resort project in Gombak, Selangor. The land belongs to MPHB subsidiary Magnum Corp Bhd.

Kheoh said the company was still monitoring market sentiment but had no plan to start work any time soon. “It is a complex and difficult project, and the situation now is not suitable to start anything,” she said.

Magnum has 2,266ha of land, including some in prized locations such as Gombak, Rawang and Sepang, as well as a parcel near Universiti Sains Malaysia in Penang.

These plots of land hold good potential for future property development.

Asked if MPHB was looking at revaluing some of its land and properties, Kheoh said the company was comfortable with having its assets on book value.

MPHB recently acquired a 9.45% stake in Farlim Bhd for RM3.2 million, raising its shareholding in the property developer to 10.9%. Analysts described the move as an attempt to venture deeper into the property sector.

Meanwhile, MPHB’s gaming business is holding steady. Although the numbers forecast ticket sales dipped to RM2.87 billion in the financial year ended Dec 31, 2008, it was still the group’s biggest income-generating division.

As of the end of the first quarter ended March 31, MPHB had RM585 million in cash and cash equivalents, up 24.75% from RM468.94 million at end-2008.

Total dividends paid amounted to RM80.46 million in fiscal year 2008, representing a 62% payout ratio.

During the first three months of the year, its brokerage and financial services divisions also showed signs of recovery.

The stockbroking arm, represented by Dynamic Pearl Sdn Bhd and its subsidiary A A Anthony Securities Sdn Bhd, recorded a pre-tax profit of RM2.62 million. It made a pre-tax loss of RM3.6 million a year earlier.

The insurance business, meanwhile, managed to narrow its pre-tax loss to RM793,000 from RM9.8 million previously.

Going forward, analysts said the number forecast operations would remain MPHB’s main income contributor, given the lack of other major earnings drivers.

By The EDGE Malaysia (by Tony Goh)