Petaling Jaya, 10 June 2013:
Long-standing property and education group Paramount Corporation Berhad (PCB) has mapped out a strategy for steady growth, as detailed to its shareholders at the company’s Annual General Meeting held in Petaling Jaya today.
The group’s full year 2012 and Q1 2013 results are reflective of this, with both key business divisions – property and education – showing promise.
Speaking to shareholders, PCB Executive Deputy Chairman and Group Chief Executive Officer Dato’ Teo Chiang Quan said that while 2012 had been a year of mixed performances, the strong start to Q1 2013 and the plans the company had laid out for the next few years stood the company in good stead.
He said group revenue declined 5% year-on-year, from RM473.8 million in 2011, to RM450.0 million in 2012, mainly as a result of a number of delays in project rollouts.
However, PCB’s education business, under the KDU Education Group, showed positive revenue growth, with revenue growing from RM99.8 million in 2011 to RM110.5 million in 2012, on the back of steady increases.
Group profit before tax (PBT) declined 31%, from RM110.4 million in 2011, to RM76.2 million in 2012. RM55.1 million of the year’s PBT was from the property and construction division, while RM28.3 million was from the education division. The Company is proposing to pay 5 sen single-tier final dividend in June 2013.
Dato’ Teo went on to provide a snapshot of results for Q1 2013, saying that group revenue for Q1 FY13 increased by 6% to RM110.5 million, up slightly from RM104.3 million in Q1 FY12.
This was mainly attributable to revenue from the Group’s education division, which increased by 20% for Q1 FY2013 to RM30.7 million from RM25.5 million in Q1 FY12.
Revenue for the property development division for corresponding period increased by 2% to RM45.7 million from RM44.6 million in Q1 FY12, mainly due to higher revenue recorded from the Bukit Banyan development in Sungai Petani and Sejati Residences development in Cyberjaya.
PCB group profit before tax (PBT) for Q1 FY13 increased by 7% to RM20.4 million, from RM19.1 million recorded in Q1 FY12. PBT for the property division for Q1 FY13 decreased by 17% to RM11.3 million from RM13.7 million in Q1 FY12 due to the lower margins stemming from a high composition in sales of low medium cost apartments for the Kemuning Utama development.
However, this was offset somewhat by PBT for the education division, which increased in Q1 FY2013 by 26% to RM10.1 million, from RM8.0 million in Q1 FY12, as a result of higher revenue recorded by the primary and secondary schools.
Overall, Dato’ Teo said the past year had been a good one for the education group, citing its private and international schools under the Sri KDU® brand, in particular, as doing exceptionally well.
“This increase in revenue is mainly derived from the operations of the international primary and secondary schools, with the international primary school commencing its operations in Q3 FY12. More than the increase in revenues though, the opening of the international primary school is a significant step in our aim to become a full-spectrum education provider and supports our vision of making the Sri KDU® brand a nationwide offering,” said Dato’ Teo.
He added, “It also complements the national curriculum offering we have; parents now have a choice of programmes, but continue to be assured of the KDU focus on good quality education at great value, while staying true to our ethos of moulding students with Malaysian hearts and global minds.”
Dato’ Teo also provided the reasons for the softening of the Group’s overall property business’ revenue, “We did have some delays in the rollout of our projects in Cyberjaya and Glenmarie, but used the opportunity to fine-tune our products and ensure we have two distinct and unique developments that would capture the market’s attention.”
“The more significant benefit of our efforts to refine our product development can be seen in our Glenmarie Utropolis project, which was launched in May. Close to 90% of Phase 1 of the serviced apartments have been sold, and we are also seeing strong interest in the SOHO units and retail centre at Utropolis, good indicators for the future success of this development.”
Utropolis is a 21.7-acre integrated development, which will be home to KDU University College’s flagship campus in 2015. The 10-acre campus will be complemented by 11.7 acres of retail units, serviced apartments as well as SOHO’s.
Dato’ Teo added that the Group’s Sejati Residences in Cyberjaya, soft-launched at the end of last year, had also been well received.
“The first quarter of every year is generally slower, with the festive seasons, and in the case of 2013, the lead up to the general election. Now that these events are behind us, we expect the pace to pick up, and are looking forward to a busy year.”
Detailing the group’s future plans, Dato’ Teo said, “Our plan for property development is to move into integrated developments, while maintaining our reputation for developing innovative townships. We have plans for property launches in Cyberjaya, Sungai Petani, Glenmarie and on a 30-acre piece of land we have near Hicom, Shah Alam.”
He added, “In education, we want to cement our 30-year track record for high quality education at great value, while continuing to be one of the very few education groups offering the full spectrum of education – from primary and secondary, national and international, to pre-university, tertiary and post-graduate. The KDU Education Group celebrates its 30th anniversary this year, and we’ll be using the opportunity to rejuvenate our offering, especially at the college and university college level.”
He added that the Group would also be looking into investing in both its businesses, given the healthy war chest of funds the Group has, a result of its Private Debt Securities (PDS) Programme, which raised RM200 million in perpetual bonds – a first for a Malaysian non-Government-linked company.
The funds, Dato’ Teo said, would be used to buy land for PCB’s development projects and to invest in PCB’s education business. “For PCB, 2012 was a year of planning, strategising and putting in place the building blocks for sustained growth in years to come, and the start of a new strategic masterplan for the Group. There is a lot of potential to grow our business.
“We are poised and ready to make the most of the opportunity. At PCB, we are old hands, young hearts – we’re experienced, we’re embracing change and innovation, and we’re consistently working at becoming better, more efficient at what we do. And 2013 will see us start to make great strides towards that goal,” concluded Dato’ Teo.