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Plenitude plans RM400m small-scale projects

October 29th, 2010 Leave a comment

PLENITUDE Bhd (5075) plans to launch several small-scale property projects worth as much as RM400 million over the next eight months.

The builder is taking advantage of a run-up in property prices to launch the seven residential projects that will cover areas in Klang Valley, Johor and Penang.

"These properties will be launched during this financial year (ending June 30 2011), and we expect positive contribution to the bottom line over the next few years," said executive chairman Elsie Chua after the company's extraordinary general meeting in Kuala Lumpur yesterday.

The company is also planning to launch a big-scale project in Penang in two years' time, which has an estimated gross development value of RM230 million.
"The development will mainly comprise landed residential units, of course. There will be some condominiums as well," said Chua.

The company, which has more than RM75 million in cash as at June 30 2010, said it will use it as a warchest to fuel expansion, and as such, it has no immediate plans to return more cash to shareholders.

Plenitude currently has a policy of returning between 20 and25 per cent of net profits as dividend to shareholders.

"That's what the shareholders were asking for, but we need this cash because we know we want to expand. If we cash it out, instead of having our own cash, we start borrowing, then it's bad," said Chua.

Zukarnine Shah, a director, added that the deciding factor for not returning the cash as dividend is the company's sustainability.

"If we issue out as dividend, shareholders will be happy for sure, but can we sustain? Will we have enough working capital or reserves to acquire valuable land to expand? So, we are trying to keep a balance, but of course, balance is subjective," Zukarnine said.

Chua said its landbank, currently at about 720ha, can keep the company busy for the next 10 years.

SOURCE: Business Times

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