Will Charlton Residences be SingXpress Land's lucky charm?

The Group is recovering from a net loss of S$0.34 million but expects to record a profit in FY2013 by realising 50% of the revenue from Charlton Residences.

SingXpress Land Ltd. announced its results for the financial year ended 31 March 2012 and said that it expects to recognise approximately S$30 million of the revenue from Charlton Residences in FY2013.

Apart from Charlton Residences, SingXpress Land – which has unveiled an “investment banking approach” to property development – launched or announced two public housing developments immediately after the end of FY2012.

The first was Pasir Ris One, a public housing development under Design, Build and Sell Scheme which was launched on 27 April 2012. The Company had acquired a land parcel for the development of Pasir Ris One at Pasir Ris Central/Pasir Ris Drive 1. On 14 May 2012, the Company successfully bid for an Executive Condominium land parcel at Tampines Central 7/ Tampines Avenue 7/ Tampines Avenue 9, with a tender price of S$233.5 million, holding a 30%-stake in the investment alongside with Creative Investments Pte Ltd and Kay Lim Realty Pte Ltd.

The SGX Catalist-listed Company announced a net loss of S$0.34 million for FY2012. Revenue of S$0.89 million in FY2012 was mainly derived from rental income as opposed to sales of properties in FY2011. The results included a fair value gain of S$2.32 million in FY2012 pursuant to the revaluation of the investment properties in Hong Kong and Singapore.

The Group recorded a net loss per share of 0.023 cent in FY2012 compared to net earnings per share of 0.53 cent in FY2011. Net asset value per share decreased to 1.26 cents from 3.61 cents as at 31 March 2011.

Outlook

Mr Chan Heng Fai, Executive Chairman of SingXpress Land, said, “We expect to recognise approximately half of the revenue of S$59.6 million to be recorded from the pre-sales of Charlton Residences units which will contribute to a positive financial performance in FY2013 – the first full year of the rollout of our investment banking approach to property.”

“Having unveiled a clear strategy in FY2011 to syndicate property development projects to enhance return on equity and manage risks, we are now executing this strategy decisively with the launch of Pasir Ris One and the successful bid for the Tampines EC,” he said.

In line with accounting conventions in Singapore for public housing developments, the completion of construction method is expected to be adopted for revenue recognition of Pasir Ris One, and the Group expects to recognise the bulk of the revenue and profits for Pasir Ris One in FY2015.

Assuming complete sales of Pasir Ris One, based on the indicative pricing ranges of each of the unit types, the total revenue from the development is expected to range between S$265 and S$285 million.

The Group is confident of enhancing shareholder return in the current financial year. In particular, with substantial revenue recognition from Charlton Residences in the coming year, the Group expects to record a profit in FY2013.