Glomac scales down project launches, relies on strong unbilled sales in FY21

by BERNAMA / pic by TMR FILE

GLOMAC Bhd has scaled down new project launches to RM403 million for the financial year 2021 (FY21) from RM670 million previously due to lack of market confidence, but the developer remained optimistic for the full-year outlook, guided by high unbilled sales of RM660 million as at July 31, 2020.

The COVID-19 pandemic has affected the property market, worsened the current real estate market situation and distressed many property developers.

The rise in non-performing loans (NPLs) due to inadequate household income to repay housing loan instalments, combined with the unemployment rate that is projected to rise continually have pressured the industry.

Group managing director and chief executive officer Datuk Seri Fateh Iskandar Mohamed Mansor said it is timely for the government to reintroduce schemes for first-time house buyers such as FundMyHome+Depositku, and at the same time revise the guidelines for foreign ownership of property to help stimulate the market.

“The take-up rate for housing is dependent on market sentiment. We expect NPLs and the unemployment rate, which have fluid figures, to be higher in the near future.

“As for Glomac, we will try our best to maintain the performance in the current situation,” he said in a virtual press conference after the 36th annual general meeting today.

The government has introduced the Home Ownership Campaign 2020-2021 in June this year under the National Economic Recovery Plan (Penjana) in order to spur the property sector.

Under the initiative, successful applicants can enjoy 100 per cent stamp duty exemption for the instrument of transfer for any residential home purchase up to a value of RM1 million, and for properties worth more than RM1 million and up to RM2.5 million, a three per cent stamp duty needs to be paid for the instrument of transfer.

“Banks, too, have to be more flexible in giving out loans. We expect demand for residential property to still be strong currently.

‘We hope banks will be more lenient… perhaps, the reintroduction of schemes and enticing more foreign buyers can be a temporary measure, for instance, a year, because right now foreign buying is less than two per cent,” he added.

Glomac is expected to focus on affordable landed residences at ongoing township developments in FY21, namely Saujana Perdana, Saujana KLIA and Saujana Jaya, Johor.

“There is demand for landed township development, at least we see the momentum in the last two to three months.

“People want slightly bigger houses, dedicated place as a lot of us work from home. Therefore, we will convert certain rooms and layouts into work from home (WFH) spaces or study space. We also work with telecommunication companies to upgrade the wifi connectivity into our houses,” Fateh Iskandar said.

For FY20 ended April 30, 2020, the group achieved new sales of RM385 million, an increase of 19 per cent as compared to FY19, mainly driven by the success of 121 Residences and affordable landed residential phases at Saujana Perdana in Sungai Buloh.

The strong sales performance during FY20 boosted its unbilled sales to RM650 million as at end-FY20, a 37 per cent increase from RM476 million in FY19 due to the favourable product mix and strength of Glomac’s development, which are strategically targeted at the affordable and mid-market segments.

The group’s balance sheet remains strong as the cash position increased to RM176.4 million, while net gearing decreased to 0.28x against shareholders’ funds of RM1.1 billion.

Net assets per share attributable to owners of the company amounted to RM1.42, and company’s board has proposed a final single-tier dividend of 1.0 sen per ordinary share, which translated to a dividend yield of approximately 3.3 per cent.