Roxy-Pacific builds up Singapore landbank

OCT 31, 2017


ROXY-PACIFIC Holdings, which posted an 81.5 per cent drop in third-quarter group net profit to S$1.5 million, has built up a Singapore residential landbank in the past couple of years that can potentially generate over 400 freehold private homes in seven projects.

These will be from the 271,627 sq ft of potential gross floor area attributable to the group that can be developed on the seven sites.

The seven include the group's S$36.3 million purchase of Dunearn Court through a collective sale announced last week; on Monday, Roxy-Pacific said that the owners' unanimous approval has been secured.

At another site, in Jalan Eunos, Roxy is developing a 48-unit, five storey residential project, Navian, which it previewed last Saturday at an average price of about S$1,500 per square foot. Options have been issued for over 10 units.

The other five sites in the group's Singapore landbank are in Pasir Panjang Road, Grange Road, Upper Bukit Timah Road, River Valley Road and Guillemard Lane.

The property and hotels group said on Monday evening that for the three months ended Sept 30, 2017, revenue fell 33.7 per cent to S$60.3 million from the year-ago period.

For Q3 FY2017, revenue from property development, which contributed 77 per cent of the group's turnover, shrank 39 per cent to S$46.5 million from S$76.2 million in Q3 FY2016.

"The decrease was largely due to lower revenue recognition from Jade Residences, Whitehaven, LIV on Wilkie and an absence of revenue recognition from LIV on Sophia following the completion of these projects in Q4 2016 and early 2017. The decrease was partly offset by higher revenue recognition on construction progress of Trilive," Roxy-Pacific said. These projects are in Singapore.

Overseas, although the group has made good progress in the sales and construction of its projects in Australia, it can recognise revenue only on completion of a project - unlike in Singapore, where revenue from residential projects is booked progressively based on the percentage of a project's completion.

For example, as at Oct 17 this year, 95 per cent of the 44 apartments at The Hensley along Potts Point in Sydney were sold. Octavia, comprising 43 apartments in the Killara area of Sydney, is also 95 per cent sold.

Revenue from hotel ownership shrank to S$10.9 million in Q3 FY2017 from S$11.5 million in Q3 FY2016. The drop was mainly due to lower revenue per available room from the Grand Mercure Singapore Roxy amid subdued corporate activity caused by continued global economic uncertainty in certain sectors such as the offshore and marine and pricing competition from new hotel supply.

Revenue from property investment dipped to S$2.9 million from S$3.2 million.

The group's overall gross profit margin rose to 29 per cent in Q3 FY2017 from 20 per cent in Q3 FY2016 - on the back of higher margin from property development. This was chiefly because of writeback of an over-provision of development cost for certain Singapore projects completed in prior periods.

Earnings per share eased to 0.13 Singapore cent in Q3 FY2017 from 0.68 Singapore cent in the year-ago period. Net asset value per share edged up to 42.23 Singapore cents as at Sept 30, 2017 from 41.2 Singapore cents as at Dec 31, 2016. The counter ended 0.5 Singapore cent lower at 58 Singapore cents on Monday.

Roxy's bottom line was dragged by a doubling in other operating expenses to S$6.8 million, largely due to provision for fixed assets to be written off from the sale of the 59 Goulburn Street office building in Sydney; the sale was completed earlier this month. As well, share of results of associates slipped 87 per cent to S$507,000 - chiefly from lower revenue booked from the Eon Shenton mixed development slated to be completed by year end.

For Singapore and overseas projects that the group has already launched, there is S$465.6 million balance attributable progress billings to be booked from Q4 FY2017.

For the nine months ended Sept 30, net profit fell 42 per cent to SS$22.1 million.