SLB Development, the property development subsidiary of construction firm Lian Beng Group has posted earnings of $13.4 million for the FY2021 ended May, 23.5% higher than earnings of $10.8 million for the FY2020.
This is due to the stronger take up in units in the group’s development projects such as Affinity @ Serangoon, Rezi 24 and Riverfront Residences. All three are currently almost fully sold.
The higher earnings were also thanks to the short-term recurring rental income contributions from its newly acquired development property, Thye Hong Centre.
Earnings per share (EPS) for the FY2021 stood at 1.46 cents from 1.18 cents in the FY2020.
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Revenue for the FY2021 fell 8.2% y-o-y to $42.4 million due to the lower contribution recognised from Mactaggart Foodlink. This was offset by an increase in revenue recognised from INSPACE and the sale of the remaining unit from T-Space.
Cost of sales stood 14.8% y-o-y higher at $31.6 million due to higher cost of sales recognised from INSPACE and the remaining unit sold from T-Space.
Gross profit for the FY2021 fell by 42.1% y-o-y to $10.8 million mainly due to the lower profit margin from the contributing projects and the result of the Covid-19 pandemic.
Other operating income grew by 7.7% y-o-y to $2.3 million in the FY2021 mainly due to higher sales commission amortised to profit or loss in the FY2021 as the group’s development projects progressed.
SLB’s share of results of joint ventures and associates grew by $9.4 million from share of losses of $2.5 million in the previous FY to share of profits of $6.9 million in the FY2021.
This was due to the increase in development profits recognised from Affinity @ Serangoon, Riverfront Residences and Rezi 24 as additional units were sold and development profit recognised.
As at end-May, cash and cash equivalents stood at $40.2 million.
For the FY2021, the group has recommended a final dividend of 0.1 cent per share.
The group says its property developments remain affected by manpower constraints on the back of tighter border controls despite the ongoing recovery and gradual resumption of construction work.
It says it will remain cautious when seeking opportunities to replenish its land bank and that it will continue to look out for business opportunities in the region through acquisitions, joint ventures, as well as strategic alliances.
“The diversified nature of our asset portfolio across the industrial, residential and mixed-use sectors; as well as a broadened geographical reach through our fund management business, has weathered us better during the year. Additionally, together with our strategic partners, we have made good progress and have seen a pick-up in sales momentum for three joint venture residential developments in Singapore,” says Matthew Ong, executive director and CEO of SLB.
“In fund management, extending beyond our UK investment, we are pleased to have invested in the Australian market, one in which we already enjoy a good network and have strong familiarity with.”
“Together with our recent acquisition of Thye Hong Centre and the ongoing enhancement works to the ground floor, we are looking at enhancing the short-term income for the asset. This is in line with our long-term goal of creating new and recurring income streams for sustained growth in the short-term while waiting for the right market condition to re-develop the building, which continues to feature prominently in our strategy given the challenging global environment,” he adds.
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Shares in SLB closed 0.2 cents higher or 1.5% up at 13.2 cents on July 29.
Photo: Samuel Isaac Chua / The Edge Singapore
