Chairman's Statement

Extracted from Annual Report 2016

PERFORMANCE REVIEW
2016 was a difficult year of the Group as predicted in the Group's Annual Report for the preceding year.

During the financial year ended 30 June 2016, the property industry went through tough and uncertain times. High prices, the cautions lending approach by banks, high household indebtedness, roller coaster world crude oil prices, all made the property market extremely challenging to navigate. Many high end launches proposed by big developers were deferred to some future dates. The industry as a whole encountered a slowdown. Prudently we did not launch any project thus avoiding potential poor sales and liquidity pressures. We did however continued to improve our infrastructure layout, spending minimum funds and preparing for the return of a robust market.

Our 3 PFI projects continued to track satisfactorily. All 3 are completed and are providing 20-year cash flows, by way of availability Charges and Maintenance fees from each of the completed PFI project.

Arising from the completing PFI's and overall property industry slowdown, for the financial year under review, the Group recorded a lower revenue and profit after taxation. Revenue decreased from RM276.6 million to RM178.9 million amd profit from RM66.6 million to RM38.9 million. I would like to clarify the borrowing of the Group. These borrowings totaling RM693.0 million are essentially for the 3 PFI's and these are more than covered by total financial assests of RM924.0 milliom.

While the property sector had been inactive, the government acquisition of part of the Klang Land for the West Expressway yielded a gain of RM22.5 million for the Group.

 

PROSPECT AND OUTLOOK
The propperty market will continue to be very challenging over the next 2 years. Our focus will be prudent and cautious, focusing on improving infrastructure works, nurturing and managing the 20-year cash flows of our 3 completed PFI's and looking for more opportunities in this area.

 

Dato’ Abdul Mokhtar Ahmad
Executive Chairman


29 November 2016
Kuala Lumpur