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07-06-12, 14:00
http://www.businesstimes.com.sg/premium/companies/others/oxley-rules-out-need-fund-raising
Published June 07, 2012
Oxley rules out need for fund raising
CEO's comment quells rumours of a potential cash call exercise
By Ven Sreenivasan
PROPERTY upstart Oxley Holdings does not see a need to do cash raising amid a steady stream of project income and access to bank finance.
"We have been able to use internal resources and bank support, so there is no need for fund raising," said controlling shareholder and CEO Ching Chiat Kwong, effectively dismissing market rumours of a potential cash call exercise.
"We have sold most of our properties and we also have access to directors' loans to finance projects," he added.
He was responding to BT's question about how the company, which rode the shoe-box apartment frenzy, and now has some 14 residential projects and six industrial/commercial projects onstream, is managing its cash requirements.
The issue became all the more pertinent as Oxley launched its aggressive land-banking this year, including the en-bloc purchase of Hong Leong Gardens, McDonald's Place at King Albert Park, Seletar Gardens at Yio Chu Kang, and other properties in Joo Chiat, East Coast Road and elsewhere.
"Many of these were joint ventures with partners like Lian Beng, Orange Tee and others," Mr Ching added. "We are very comfortable with our cash position."
To date Oxley has sold 100 per cent of the units in 11 of the 14 residential projects it has launched since 2011, with another 99 per cent sold. The latest - Promenade@Pelikat and Vibes@Upper Serangoon - are about 80 per cent sold. Eleven of the 14 projects have their TOP dates between this year and 2014.
On the commercial side, it has sold close to 80 per cent of the Oxley Tower (Robinson Road) units put on the market (including 100 per cent of all shop lots there), and 84 per cent of Robinson Square next door. On the industrial portfolio, Arcsphere@Aljunied is 100 per cent sold, Oxley BizHub and The Commerze@Irving are 80-90 per cent sold, and Oxley BizHub 2 is 43 per cent sold.
Mr Ching reckons total sales on Oxley's books now stand at around $2 billion, with another $1.5 billion to be launched later this year.
The company posted net profit, including minority interests, of some $21 million for the nine months to end March 2012, and analysts expect full-year earnings to be in the $30-40 million range.
But the real kicker to the bottomline will only come in late 2013 and 2014, said Mr Ching.
"We are heading for an earnings explosion during the next two years as our residential projects come to completion. And we will lock in earnings from our industrial and commercial real estate on completion of TOP from 2014 to 2017."
He added that new projects from recent landbankings and acquisitions will be launched later this year to keep fuelling earnings growth well into the next decade.
So why is he doing so many "road-shows" in Europe and Asia?
"My corporate presentations are to boost the profile of this company," he said.
Then anticipating the next question he added: "It is not to raise funds. We are applying to graduate to the mainboard (from Catalist) and I think it is appropriate to keep investors informed of who we are and what we are about."
Published June 07, 2012
Oxley rules out need for fund raising
CEO's comment quells rumours of a potential cash call exercise
By Ven Sreenivasan
PROPERTY upstart Oxley Holdings does not see a need to do cash raising amid a steady stream of project income and access to bank finance.
"We have been able to use internal resources and bank support, so there is no need for fund raising," said controlling shareholder and CEO Ching Chiat Kwong, effectively dismissing market rumours of a potential cash call exercise.
"We have sold most of our properties and we also have access to directors' loans to finance projects," he added.
He was responding to BT's question about how the company, which rode the shoe-box apartment frenzy, and now has some 14 residential projects and six industrial/commercial projects onstream, is managing its cash requirements.
The issue became all the more pertinent as Oxley launched its aggressive land-banking this year, including the en-bloc purchase of Hong Leong Gardens, McDonald's Place at King Albert Park, Seletar Gardens at Yio Chu Kang, and other properties in Joo Chiat, East Coast Road and elsewhere.
"Many of these were joint ventures with partners like Lian Beng, Orange Tee and others," Mr Ching added. "We are very comfortable with our cash position."
To date Oxley has sold 100 per cent of the units in 11 of the 14 residential projects it has launched since 2011, with another 99 per cent sold. The latest - Promenade@Pelikat and Vibes@Upper Serangoon - are about 80 per cent sold. Eleven of the 14 projects have their TOP dates between this year and 2014.
On the commercial side, it has sold close to 80 per cent of the Oxley Tower (Robinson Road) units put on the market (including 100 per cent of all shop lots there), and 84 per cent of Robinson Square next door. On the industrial portfolio, Arcsphere@Aljunied is 100 per cent sold, Oxley BizHub and The Commerze@Irving are 80-90 per cent sold, and Oxley BizHub 2 is 43 per cent sold.
Mr Ching reckons total sales on Oxley's books now stand at around $2 billion, with another $1.5 billion to be launched later this year.
The company posted net profit, including minority interests, of some $21 million for the nine months to end March 2012, and analysts expect full-year earnings to be in the $30-40 million range.
But the real kicker to the bottomline will only come in late 2013 and 2014, said Mr Ching.
"We are heading for an earnings explosion during the next two years as our residential projects come to completion. And we will lock in earnings from our industrial and commercial real estate on completion of TOP from 2014 to 2017."
He added that new projects from recent landbankings and acquisitions will be launched later this year to keep fuelling earnings growth well into the next decade.
So why is he doing so many "road-shows" in Europe and Asia?
"My corporate presentations are to boost the profile of this company," he said.
Then anticipating the next question he added: "It is not to raise funds. We are applying to graduate to the mainboard (from Catalist) and I think it is appropriate to keep investors informed of who we are and what we are about."