Tuesday, November 29, 2005

MK Land rethinks sales strategy

MK Land Holdings Bhd will improve sales efforts and venture for the first time into landed property in the Klang Valley to strengthen the group’s profitability, its executive director Datuk P Kasi said.

On Wednesday, the property developer announced a lower net profit of RM15.22 million for its first quarter ended Sept 30, 2005, compared with RM20.8 million a year ago, while revenue fell 35.36% to RM114.71 million from RM177.73 million previously.

For the financial year ended June 30, 2005 (FY05), MK Land posted a net profit of RM120.21 million, 25.6% lower than the RM161.57 million a year ago. Revenue slid 2.23% to RM904.99 million from RM925.67 million.

Speaking to reporters following the company’s AGM and EGM in Shah Alam on Nov 24, Kasi blamed slow sales, delays in construction and provisions for late delivery charges as the main causes of the weaker financial performance.

He said that in order to maintain FY05’s performance, MK Land would have to launch new products and lock in sales.

“We are improving our sales efforts; we are trying to relook our sales strategies and we will see how we can market new products.

“We are now replanning some of our new launches in 2006 and we hope this will help us reposition ourselves in the market. Within our current projects, we are trying to reposition ourselves in terms of pricing and the facilities we provide,” he said.

Another strategy, said Kasi, was to go into landed property in Damansara Perdana. “In the Klang Valley, we have never introduced landed property products. The semi-detached homes in Damansara Perdana, of which we hope to launch Phase One in 2006, will give us a new avenue to improve our performance,” he added.

He said Phase One would comprise 35 to 45 units and have a gross development value of RM50 million to RM55 million. Additional phases, he said, would be introduced as and when the market demand was there.

“Other than semi-dees, we are also planning for a package of bungalows within the Damansara Perdana area but these are still in the planning stages,” he added.

Meanwhile, commenting on market speculation that MK Land would be issuing RM300 million in bonds, Kasi said: “The company has not announced the issue of bonds. People are speculating that we will. We are only considering it because interest rates may go up and all that.”

He said the speculated figure was probably derived from the company’s existing bonds. “We see no reason to raise another RM300 million.”

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