GADANG Holdings Bhd, which counts construction as its main income generator, is beefing up its property development business to enhance income.
The company told Bursa Malaysia recently that it is positive on its sales outlook, in view of its favourable product mix offerings.
It said Gadang will remain focused on affordable housing in line with the present market demand.
The company said this is due to the current sluggish property market.
Its property arm has built low- and medium-cost apartments and houses since Gadang diversified into property development in 1996.
To date, the property division has landbank of 178.95ha, which includes joint-venture development projects.
The estimated gross development value (GDV) for the landbank is RM3.9 billion.
Gadang’s ongoing projects are Laman View mixed development in Cyberjaya, The Vyne residential development in Salak South, Bandar Puncak Sena township development in Kedah and Capital City integrated complex development in Johor Baru.
Laman View and Bandar Puncak Sena are the two biggest developments, with landbank of 48.96ha and 80.9ha, respectively.
The RM1.5 billion Laman View is a freehold mixed development that comprises double-storey and guarded-and-gated terrace houses, condominiums, PR1MA housing and commercial developments.
It is a joint venture between Gadang Land Sdn Bhd and Cyberview Sdn Bhd, the landowner and master developer of Cyberjaya.
Bandar Puncak Sena, with a GDV of more than RM300 million, includes medium-cost terrace and semi-detached house, bungalows and a commercial hub.
The property division’s unbilled sales stand at RM134 million which, according to analysts, will render revenue visibility over 0.54 times the fiscal year 2017’s property segmental revenue.
For the nine months ended February 28 this year, Gadang reported overall revenue of RM412.3 million and a net profit of RM71.9 million, despite weaker economic data last year.
For the same period a year ago, revenue and net profit were RM379 million and RM95.9 million, respectively.
The property development division, however, posted lower revenue of RM123.40 million, a 30 per cent drop from RM176.03 million in the same period last year.
The profit before tax fell from RM49.55 million or 22 per cent, to RM38.6 million, mainly due to completion of some development projects.