PROPERTY
The listed developer Land Houses Plc (LH) plans to aggressively launch at least 18 new projects worth a combined 40 billion baht with an aim to increase sales by 25-30%, the highest in the past five years.
It hopes to return its focus to profits from its core business – housing – after years of increases in its non-core businesses. LH’s usual target growth is between 10% and 20% annually.
Senior executive vice-president Adisorn Thananan-narapool said the profit ratios from non-core businesses were 25%, 30%, 30% and 40% from 2007 to the first nine months of 2010, respectively.
LH posted a net consolidated profit of 3.9 billion baht in 2009, of which 2.8 billion came from housing and 1.17 billion from non-core businesses.
It expects to generate a profit of 1.4 billion baht in 2010 from non-core businesses, including subsidiaries Quality Houses, LH Bank, HomePro, Q-Con and Kasemrad Hospital.
It also handles rental properties including four serviced apartments where it invested 6.6 billion baht, two rental residential projects that cost 1.8 billion and a retail project at the Asok intersection for 4.2 billion.
LH targets profit growth of 10-15% from non-core businesses in 2011.
He said the company had 20 billion baht in sales last year, up by 19.5% from 2009. It targets 25 billion in sales in 2011, an increase of 25%.
At the end of 2010, LH had 57 projects on hand – 43 in greater Bangkok and 14 in the provinces. Last year it launched 18 new projects worth a combined 30.1 billion baht.
The company realised it missed the “condominium bandwagon” as it earlier concentrated on pre-built projects and only had a few launches. Therefore, last year LH shifted to presold condominiums and currently has backlog sales of around 4 billion baht.
“After five years in the condominium market, we found presales helped us avoid opportunity loss,” he said.
LH has a 1-2% share in the condominium market, 4% in townhouses and 20% of the single house market.
It plans to invest 6 billion baht for land acquisition this year for new development by 2012 and beyond. It will also invest 1.8 billion baht in LH Bank to raise its registered capital to 10 billion baht, making it a commercial bank listed on the stock market this year.
LH has already locked in prices for 50% of its construction materials for one year, with the remainder for six months, so it is confident it can control rising costs at 3% this year. It plans to adjust prices by 3-4% on average.
The company will also put around 230 million baht into a joint venture developing the Terminal 21 commercial complex at the Asok-Sukhumvit intersection.
Last week it issued bonds worth 2.5 billion baht with an interest rate of 3.54% with a three year duration, and it plans to issue another 1.5 billion baht in the third quarter of 2011.
LH shares closed yesterday on the Stock Exchange of Thailand at 5.70 baht, up 25 satang, in trade worth 293.7 million baht.
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About the author
Writer: Kanana Katharangsiporn
Position: Business Reporter