PropNex has reported earnings of $14.3 million for the 4QFY2021 ended December, 90.5% higher than earnings of $7.5 million in the same period the year before.
The quarter’s earnings have brought the SGX-listed property agency’s FY2021 earnings to $60.0 million, more than double the earnings of $29.1 million in the FY2020.
Earnings per share (EPS) for the 4QFY2021 and FY2021 stood at 3.86 cents and 16.22 cents respectively on a fully diluted basis.
Revenue for the 4QFY2021 grew by 56.1% y-o-y to $242.0 million mainly due to higher commission income from agency services, as well as from its project marketing services on the back of higher transactions completed during the quarter.
4QFY2021 gross profit was up by 68.9% y-o-y at $26.0 million in tandem with the revenue increase.
Other income in the 4QFY2021 fell 16.0% y-o-y to $1.5 million due to the lower government relief grants.
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Staff costs during the quarter increased by 21.0% y-o-y to $4.7 million due to the increment of salaries, high provision for performance-linked bonuses and the increase in the average staff headcount.
4QFY2021’s other expenses fell by 2.2% y-o-y to $3.2 million due to the lower impairment loss on investment in associate, a write-off in plant and equipment, lower advertising and marketing. All these were partly offset by an increase in recruitment expenses.
As a result, profit before tax in the 4QFY2021 increased 102.9% y-o-y to $18.5 million.
During the FY2021, PropNex reported an 86.5% y-o-y growth in FY2021 revenue to $957.5 million.
On Feb 21, the possibility that the agency was about to report revenue crossing the $1 billion mark for the full-year was raised after the company responded to queries from the Singapore Exchange (SGX) on Feb 17.
See: Is PropNex about to report $1 bil in revenue for FY2021?
As at end-December, cash and cash equivalents stood at $145.6 million.
PropNex has proposed a final dividend of 7.0 cents, which is its highest-ever dividend payout.
The final dividend brings the agency’s total dividend for the FY2021 to 12.5 cents a share, or 77% of the group’s total earnings for the year.
Unitholders will receive their dividends on May 20.
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“Our steadfast performance throughout the year has culminated in another solid quarter, and we are extremely pleased to close FY2021 on such a strong note despite the challenging landscape. The latest market data reflects the ongoing healthy demand for new homes, amidst a declining supply of unsold inventory,” says Ismail Gafoor, co-founder, executive chairman and CEO of PropNex.
“At PropNex, we are gearing up for the next growth trajectory as we continue to boost our expertise by expanding our sales force past the 11,125-strong mark (as at Feb 17), cementing our position as the preferred real estate agency for career development among new and experienced salespersons. Also, our strategic foray into the good class bungalow (GCB) segment with the latest senior appointment of Henry Lim to lead our prestige landed division will allow us to capitalise on new opportunities in this area,” he adds.
In its outlook statement, PropNex says it anticipates private home sales and price movement to taper slightly in 2022 on the back of the cooling measures introduced in December 2021, as well as the rising interest rate environment.
The group is forecasting the pace of price growth to ease to 3% to 5%. Transaction volume for private new home sales is estimated to dip to between 9,000 to 10,000; resale properties may dip between 15,000-16,000.
In the meantime, the HDB resale market is expected to continue to perform “relatively well” in 2022.
“This is driven by demand from Singaporean households and first-time home buyers, particularly those who do not wish to wait for up to five years for their new BTO flat to be completed,” says the group in its Feb 24 statement.
PropNex projects that HDB resale prices could see a more moderate 6% to 8% increase this year, with resale volumes potentially coming in at around 30,000 flats.
Shares in PropNex closed 7 cents higher or 4% up at $1.82 on Feb 24.
Photo: Samuel Isaac Chua/The Edge Singapore
