S P Setia Berhad announced that the Group achieved total sales of RM3.82 billion for the financial year ended 31 December 2016, exceeding its revised sales target of RM3.50 billion. The Group also recorded a remarkable profit before taxation (PBT) of RM1.18 billion, a record PBT achievement for the Group for a 12-month financial period, on the back of revenue totalling RM4.96 billion for FY2016 and with that, the Group achieved profit attributable to shareholders' of RM808.0 million.
Local projects contributed RM3.50 billion representing 92% of the total sales and the remaining 8% was derived from the Group's international projects. The Central region contributed the most with RM2.64 billion whereas the Southern, Northern and Eastern regions contributed RM859.7 million. The Group recorded its strongest sales performance in the fourth quarter of the year in review totalling RM1.78 billion.
"We are very pleased with the sales achievement as it not only demonstrates the versatility of the Group but it shows the strength of Team Setia in coming together to overcome the challenges in a soft property market" said Dato' Khor Chap Jen, President and CEO of S P Setia Berhad Group.
Over in London, the United Kingdom, the recent success of securing the long-term lease contract for 500,000 square feet of office space in Battersea Power Station by Apple Inc will enhance and increase the value of the iconic project while re-enforcing our vision of making Battersea Power Station the most sought after place-making development in London. In addition, two out of the 12 blocks of the development's Phase 1 units have been completed and handed over in stages to the purchasers since December with the remaining blocks to be completed and handed over by 2nd quarter of FY2017.
Meanwhile, on the Australian front, the Group is planning to launch two new projects in Melbourne, namely on the newly acquired sites in Prahran and Exhibition Street while continuing to look out for new land banking opportunities as the management is convinced that the growth opportunity remains strong Down Under. Parque, Setia's second development in Melbourne was successfully completed and handed over to its purchasers in November 2016.
Moving forward for 2017, the Group will continue to adopt the strategy of launching more mid-priced landed properties and affordable housing to cater to the proven strong demand for these product types at established townships. It will be selective in rolling out properties under the 10:90 scheme. The Group targets to launch the final tower (Tower B) of Setia Sky Seputeh, a luxury condominium development in Seputeh, Kuala Lumpur as well as the transit-oriented development of TRIO apartments at Bukit Tinggi, Klang.
On 6 December 2016, the Group had also successfully completed the renounceable rights issue exercise which raised gross proceeds of RM1.13 billion to fund the Group's current working capital requirements as well as for future property development and expansion plan. This successful fundraising which was completed amidst the current challenging market augurs well for the Group's land bank expansion plan as it was timely to fund a significant land acquisition announced by the Group on 22 December 2016 for a purchase of 5 adjoining parcels of freehold land measuring 1,675 acres in Seberang Perai Utara, Penang for a purchase consideration of RM620.1 million which translates to RM8.50 per square foot.
This latest significant acquisition marks another key milestone in the Group's strategic expansion plan and to venture into new markets as it represents the Group's maiden entry into the mainland of Penang. The said land is planned for an eco-themed mixed development township which has a potential gross development value ("GDVâ€) of RM9.60 billion spanning approximately 15 years.
On the same note, the Group will continue to search for a more strategic land bank to replenish the existing acreage, especially in Klang Valley and Johor Bahru in Malaysia besides Australia as mentioned earlier.
"We are setting a sales target of RM4.00 billion for FY2017, of which 77% is expected to come from the local projects. We are convinced that the underlying demand is still strong and we will be launching many exciting and innovative campaigns to reach out to the property purchasers" he continued.
Unbilled sales stand at RM8.25 billion, with 30 ongoing projects and an effective remaining land bank of 5,218 acres with a GDV of RM76.48 billion as of 31 December 2016. This large pipeline of unbilled sales that will be delivered within the next few years provides good profit visibility for the Group and augurs well with the challenging market conditions we are facing.
The Board is confident that the Group will remain in good stead to perform resiliently in the current financial year ending 31 December 2017 against prevailing market challenges and uncertainties.