SINGAPORE – Singapore-listed PropNex Limited (“PropNex”, or the “Company”, and together with its subsidiaries, the “Group”), Singapore’s largest home-grown real estate agency, posted a net profit after tax (“NPAT”) of approximately S$4.0 million for the three months ended 30 June 2019 (“2Q2019”).
The primary private market has recovered strongly since cooling measures were introduced in July 2018. This was supported by developers pricing the new private
residential project launches aptly. On the HDB front, the market continues to see steady demand for HDB resale flats.
The Board has declared an interim dividend of 1.25 Singapore cents, representing a payout ratio of 81.1% of 1H2019 profit.
The payout ratio of more than 80% for first-half profit is the testament of the Board’s confidence in the long-term prospects of the Group.
Financial Highlights of the Group
The Group reported revenue of S$92.1 million for 2Q2019, down 24.3% from the S$121.6 million recorded in the previous corresponding period.
Overall for the half-year ended 30 June 2019 (“1H2019”), PropNex achieved revenue of S$166.3 million and NPAT of S$6.4 million due mainly to reasons.
Mr. Ismail Gafoor, co-founder, Executive Chairman and CEO of PropNex, said, “A year on from the implementation of the property cooling measures, we are seeing the primary private market recovering strongly since cooling measures were first introduced in July last year. We expect the market to remain resilient and strong sales momentum to carry through to the end of this year, driven by a strong pipeline of attractive new launches.”
“On the other hand, the private resale market, which was the hardest hit by cooling measures, is still feeling the effects. The strong en-bloc activities before the cooling measures have contributed to the strong resale activities during the first half of 2018, in comparison, this has inevitably affected our financial performance this year. Coupled with the recent economic uncertainties, the change in sentiment towards these properties has led to owners postponing and holding off the decision to sell their properties in the current economic climate,” added Mr. Ismail.
Entrenching Market Leadership in Project Launches
In 2Q2019, PropNex continues its lead in project marketing in the top 10 best-selling projects. The Group closed the highest number of units against other joint marketing agencies for almost all of the top 10 best-selling projects from April to June 2019.
However, as revenue recognition usually happens a few months after the option-to purchase is issued, in addition to the time lag required to process the various sales-related documents, transactions at the initial launch of recent popular projects are likely to be recognised only from the following quarters.
The sales performance of the second quarter tends to outperform the first quarter largely due to the festive holidays in the beginning of the year and sales momentum picks up after.
With the line-up of possibly over 26 new launches in 2H2019, the Group expects the sales activities to continue for the remainder of the year, with momentum and demand staying resilient.
To fully capitalise on the numerous project launches this year, the Group will continue to conduct consumer seminars to articulate the opportunities to potential buyers. These consumer seminars are often conducted by the Company’s executive directors Mr Mohamed Ismail S/O Abdul Gafoore and Mr Kelvin Fong Keng Seong.
While private home prices may see positive price growth in 2019, the Group anticipates the private resale market to be relatively subdued due to the property
cooling measures as owners are postponing and holding off the decision to sell their properties.
On the public housing front, the HDB resale market is reflecting continuous demand and price stabilisation.
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This article is contributed by PropNex.