Roxy-Pacific's revenue could have been better if it weren't for this

116% profit jump could've gone higher.

According to SIAS, Roxy-Pacific Holdings Limited’s (Roxy) 3Q 2012 results were strong. Profit after tax rose by 116% to S$8.2m, excluding non-recurring fair value gains recognized in 3Q 2011.

Here's more from SIAS:

We expect growth to accelerate in 2013 as we anticipate that several major projects are reaching the acceleration phase of the “S curve” in construction.

Sales Remained Brisk: Properties launched in 2011 saw sales of S$24.9m from 2 Aug to 28 Oct versus S$17.0m from 3 May to 1 Aug. Launches in 2012 saw lower sales of S$36.1m versus S$65.6m in the corresponding period.

However, the decline was due more to the lack of new launches over the last three months. As at 1 Aug, Natura@Hillview, EON Shenton and The MKZ were on
average 76% sold. By 28 Oct, they were on average 93% sold. The MKZ is Roxy’s latest 2012 launch.

New Launches in 2013: Roxy has five sites in its land bank. The acquisition of three of them is expected to be completed within this year and can potentially be launched in the earlier part of 2013. These projects will help to renew progress billings recognized as revenue over the next two to three quarters. Most of these new sites are en bloc purchases and thus require a longer time to complete.

3Q Could Have Been Better: 3Q revenue should be even higher as work on Centropod@Changi and WiS@Changi is already underway. However, existing accounting standards require commercial property sales to be recognized only at completion.

These two projects account for 17.5% of Roxy’s unearned progress billings of S$844.7m (S$817.2m@1 Aug). WiS@Changi is expected to be completed in 2013
and will add at least S$33.0m to Roxy’s top-line next year.

Positive on 2013: Furthermore, Spottiswoode 18, Space@Kovan and Treescape are estimated to be only 10% to 20% completed. We expect construction to accelerate in 2013 as work on them reaches more mature stages.

Meanwhile, the construction of Natura@Hillview and The MKZ is likely to enter the initial phases from now to next year. These factors support our positive view of the company. Accordingly, we maintain our valuation and rating.