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Monday, July 14, 2014

L&G plans bonus issue to reward shareholders

Land & General Bhd (L&G) plans to reward its shareholders by issuing bonus shares, likely to be done in the first half of next year, said its chief financial officer KC Ng.

“We do plan on doing a bonus issue, but the structure has yet to be determined,” he told The Edge Financial Daily after a briefing to announce the group’s audited results for the financial year ended March 31, 2014 (FY14) last Friday.

In April last year, the property developer proposed to raise RM77.8 million via a rights issue of irredeemable convertible unsecured loan stocks (Iculs) on a one-for-one basis.

“Our Iculs got listed in September last year, and I think that, including the major shareholders, everyone will go for the conversion of Iculs into shares sometime by September this year. The ruling is that there has to be a moratorium period of six months before embarking on another corporate exercise,” said Ng.

As a result, L&G is unable to undertake a bonus issue for at least six months after the group’s last corporate exercise.

Earlier at the briefing, Ng said L&G aims to increase its market capitalisation to more than RM500 million by the end of the calendar year or FY15, from RM379.16 million as at last Friday.

“Upon full conversion of the Iculs that we issued, we should have a market cap of up to RM658.1 million,” he said.

The group announced bumper results for FY14, with a more than twofold increase in both its revenue and net profit to RM491.9 million and RM128.7 million respectively, from RM216.3 million and RM57.2 million the year before.

As at March 31, 2014, L&G’s cash and cash equivalents stood at RM183.76 million, with total assets of RM742.3 million. It has total borrowings of RM20 million and a gearing ratio of 0.04 times.

L&G also declared a maiden dividend payout of two sen per share for FY14, representing a payout of more than 30% of its net profit. 

On the group’s future property launches, L&G managing director Low Gay Teck said the group plans to launch property projects with a total gross development value (GDV) of RM2 billion within the next 12 months.

Three of the projects in the pipeline are due to be launched in the first quarter of next year, namely the Damansara Foresta Phase 2 in Bandar Sri Damansara, Tuanku Jaafar Resort Homes in Seremban and serviced apartments in Jalan Ampang here, next to the group’s current The Elements @ Ampang project.

L&G recently gained shareholders’ approval to purchase the plot of land in Jalan Ampang for RM118.5 million.

Low said the serviced apartment development will comprise four towers with about 1,000 units. Its expected GDV is RM800 million.

Meanwhile, the Damansara Foresta project and the Tuanku Jaafar development will bring a combined GDV of RM1.2 billion to the group. Damansara Foresta will consist of two towers within 42 acres (17ha) of land next to the Bukit Lanjan Forest Reserve, while Tuanku Jaafar Resort Homes will comprise link, semi-detached and cluster homes.

Additionally, L&G has close to 2,500 acres (1,011ha) of estate land in Lembah Beringin, which Low said the group is planning to convert to residential land. Currently, it is planted with oil palm and rubber.

“We are in the midst of drafting out our master layout, and it should hopefully be firmed up by next year,” he said.

Low also said the group was in the midst of disposing of its Hidden Valley Golf & Country Club project in Melbourne, Australia, to interested parties, but not before finishing the construction of the remainder of the 900 bungalow units.

“So far we have sold 830 to 840 units of the 900. The cost of business in Australia is very high, and this project does not contribute much revenue to the group. The cost versus revenue is not justifiable, so we have decided to dispose of this project once we are done,” he said, adding that the group is still scouting for potential acquisitions overseas.

L&G shares closed one sen down to 54.5 sen last Friday. Year-to-date, the stock has risen 23.86%.

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