Petaling Jaya, 25 May 2016: Paramount Corporation Berhad’s (Paramount) 5-year business plan, now into its second year, will help the Group weather current market challenges, said its Group Chief Executive Officer, Jeffrey Chew.
Speaking at Paramount’s Annual General Meeting today, Chew said, “It is clear that the Malaysian economy has moved into a very tough period. Our current 5-year business plan, anchored on a clear and differentiating strategy of drawing synergies from our property development and education businesses, will not fully overcome these challenges, but we are confident will cushion the blow. Our strong revenue and Profit Before Tax (PBT) results in 2015, healthy balance sheet and locked-in sales will also provide a base for longer-term sustainability.”
He said that the Group has worked hard in recent months to refine and improve its on-going business initiatives. The first of these was to establish a strong and cohesive group brand identity to bring to life its strength-through-synergy strategy.
In property development, he said Paramount Property had refocused its efforts to bring to market more affordable products, where demand remains strong. Its new Greenwoods Salak Perdana township in Sepang, Selangor has met with steady demand, while its Bukit Banyan township in Sungai Petani, Kedah continued to enjoy steady sales.
Paramount Property plans to complement this offering by continuing to roll out new phases of its current developments – Sejati Residences in Cyberjaya and Paramount Utropolis in Glenmarie, Shah Alam. Despite its higher-end price point, Sejati Residences continued to sell mainly due to its strong value proposition when compared to similar products in the vicinity, he said, while Paramount Utropolis’ unique university metropolis concept and its ready catchment of students from the adjacent KDU University College and the neighbouring Glenmarie industrial area promised good returns to investors.
“Paramount Property’s approach moving forward will be to offer property buyers and investors a breadth of products at different locations and price points, which in turn will appeal to a broader spectrum of the marketplace. To this end, we will extend our portfolio this year with the roll out of two new developments – Sekitar26 Enterprise, a commercial project in a strategic location in Shah Alam; and Paramount Utropolis, Batu Kawan, which mirrors the successful university metropolis concept of Paramount Utropolis in Glenmarie. We will also unveil the masterplan for a new integrated project in the highly sought-after and mature address of Section 13, Petaling Jaya,” said Chew.
In education, Chew said Paramount Education was stepping up capabilities and building capacity to withstand market challenges.
“The education market environment is very competitive, with aggressive marketing and promotional efforts by existing players, and a number of new schools coming on stream over the next two years. Sri KDU’s excellent reputation, strong value proposition and consistent student enrolment will continue to be the main driver of performance. We also target to spur growth in student enrolment in the Northern region by opening a new KDU Penang University College campus in Batu Kawan, Penang; construction of the new campus has already commenced.”
He added that the Group would further support these initiatives by continuing its ongoing cost containment efforts across the Group and improving quality and competitiveness.
“Paramount is 47 years old this year, and we have weathered many storms. We are not taking the current market challenges lightly; but we are confident that the steps we are taking will ensure the long-term sustainability of our business. Our two businesses complement each other, not just in the synergies that can be derived, but in that the cyclical nature of the property business can be mitigated somewhat by the resilience of the education business. Our consistent dividend payments over the years is indicative of the steadiness of our business. The Group has declared a higher dividend of 8.25 sen for FY2015 to reward shareholders for the improved performance in 2015,” added Chew.
Last year, Paramount Group posted a significant 19% growth in PBT to RM101.7 million (FY2014: RM85.7 million) and a net profit of RM74.2 million for the same period, on the back of a 13% growth in revenue to RM576.0 million (FY2014: RM510 million). Paramount’s core divisions Paramount Property and Paramount Education both registered growth in revenue for the same period.