Heeton profits up 144% on boom in property development unit

Group eyes increased growth in 2010 as it will launch its Grange Road project.

Mainboard listed property group Heeton Holdings has reported a 144% surge in net profit to $17.2 million for the financial year ended 31 December 2009, compared to $7 million a year ago. Revenue rose 27% to $55.5 million, from $43.6 million recorded in FY08, boosted by a strong showing from the Group's property development business.

The FY09 profit figure also takes into account a $1.2 million contribution from the Group's discontinued operations, following the completion of the disposal of its five wet markets on 4 January 2010. Excluding this, net profit grew 152% to $16 million.

Driven by progressive revenue recognition from Juluca and The Lumos, along with final contribution from the completion of The Element@Stevens and Lynnsville331, revenue from the Group's property development business jumped 45% to $36.5 million. Revenue from investment properties, namely Sun Plaza, Tampines Mart, and The Woodgrove, grew 4% to $18.9 million despite a sluggish rental market.

Mr Danny Low, COO of Heeton said, "FY09 was a fruitful year for Heeton. We are delighted that our strategic shift in focus towards property development has begun to yield results."

For the fourth quarter, the Group posted a 175% increase in net profit to $6.8 million, on revenue of $13.6 million, compared to $2.5 million on revenue of $14 million in the previous corresponding period.

In light of the Group’s sterling performance, the Board of Directors has proposed a final dividend of 0.6 cents and a special dividend of 0.2 cents per ordinary share. During the year, the Group launched its 25%-owned Lincoln Suites, a premium condominium project in the Newton area, which was met with enthusiastic response from the market.

In November 2009, Heeton together with joint-venture partners KSH Holdings and Tee International, tendered for, and successfully acquired the Mitre Hotel site along Killiney Road for approximately S$121 million. The consortium is currently laying out plans to redevelop this 3,700 sq m site into a distinctive residential landmark.

Looking ahead, the Group is encouraged by the improving residential property landscape, and will keep a close watch for an opportune time to launch its Grange Road project, which comprises 30 units of designer apartments and penthouses within a 16-storey block. Along with this, it expects to be on the lookout for opportunities to increase its land bank through prudent acquisitions.

For the current financial year, earnings will continue to be driven by progressive recognition of sales from The Lumos and Juluca, in addition to a gain of about $5 million from the disposal of wet markets to be recorded in the first quarter.