Thriven sees thriving growth as new projects kick in

KUALA LUMPUR (Aug 27): Property developer Thriven Global Bhd, formerly known as Mulpha Land Bhd, is targeting an exponential growth in its top and bottom lines supported by unbilled sales of over RM460 million as well as new sales.

The group expects new sales of RM300 million per year between 2018 and 2020 and RM500 million annually thereafter, as new property projects kick in, said group managing director Ghazie Yeoh Abdullah (pictured).

“As we go through the quarters (of 2018), revenue will grow due to the sales we locked in in 2016 and 2017. Revenue recognition in property development comes when construction starts and we are constructing fast,” Ghazie told The Edge Financial Daily.

Thriven, derived from the words “thrive” and “driven”, posted a net profit of RM201,000 for the financial year ended Dec 31, 2017 (FY17) and went back into the black after charting a RM10.15 million net loss in FY16. Revenue surged 83.47% to RM122.87 million from RM66.97 million in FY17 because of strong sales and progress billings for its landmark Lumi Tropicana project in Petaling Jaya and Residensi Enesta Kepong affordable home and eNESTa Kepong serviced apartment projects.

In the first half of FY18, net profit came in at RM10.56 million compared to a net loss of RM4.06 million a year ago, as revenue saw a fourfold rise to RM107.79 million from RM26.19 million.

“[Actually] 2016 was a good year because we hit all our sales targets. Prior to becoming Thriven [in June 2015], the company’s (Mulpha Land) gross development value (GDV) was only RM100 million [as] there were no projects. So we had to start from ground zero,” said Ghazie, who has a 4.81% stake in Thriven. The group has ongoing and pipeline developments such as the 310-serviced apartment project called Lumi Section 13 in Petaling Jaya (to be launched in the fourth quarter of 2019) and a commercial unit development in Bukit Panchor, Penang (to be launched in two months’ time). The total GDV is RM2.05 billion and would last up to three years.

For Lumi Section 13, Thriven recently placed out shares in its wholly-owned unit, Bakat Stabil Sdn Bhd, to Hong Kong-based private equity firm Strategic Year Holdings Ltd (SYL), which has international exposure to China, Canada and the US. SYL has a 6% stake in the company but Ghazie said the interest could increase, seeing that the firm has experience investing in foreign development projects.

“So, we have been busy and the results are starting to show —growth in revenue and improvement in profitability in the first half of this year. In FY15 and FY16, the company recorded revenue growth but overheads also grew.

“But from FY18 to FY20, we will reap the low-hanging fruits. We will show positive results in the top line and the bottom line. The first half of FY18 has already indicated a good performance,” he added.

For the medium term, Ghazie said, Thriven would focus on “affordable luxury homes” for the upper mid-market and affordable homes for the lower-income segment.

Property development contributes some 90% of Thriven’s revenue with the rest coming from property investment, hospitality and lifestyle retail, and facility management. The group hopes to increase the contribution of the latter segments to 30% in the long term to create recurring income for the group.

Ghazie said for the long term (2020 to 2035), Thriven is looking at a stronger balance sheet as it embarks on corporate exercises such as private placements, joint ventures and land acquisitions.

“We will be able to pare down our debts where some RM70 million remain from the RM183 million loan we took in 2016 for the Lumi Tropicana project. We do not have borrowings in our holding company. They are only at the project level,” he said. The long-term plans also include exploring the Asian market starting with Indonesia where the group wants to tap into the affordable market segment.

“[SYL’s presence] basically gives us a footing to start exploring in the long term. We are stabilising the company to ensure we have a strong cash flow position in 2020, and [later] we will start looking at the international markets.

“Neighbouring countries like Indonesia with a bigger population will help property development grow because our population is not so big. It has good potential for affordable housing,” he added.

Asked if the soft property market has affected its business, Ghazie said Thriven is in a “comfortable” spot as it focuses on the affordable segment.

“A majority of our close peers in the industry say the market is soft even after the general election but we have seen positive sales in Taman Desa Aman [in Kedah], with 100% sales with loans.

“For Enesta Kepong, we have recorded 78% sales, although our bumiputera lots are slow-moving. So, we are asking for a conversion into non-bumiputera lots which will take time. [Having said that,] we are in a comfortable position because we have sales with loans unlike others. Our affordable project segment is 100% sold,” he added.

Ghazie, however, did not dismiss a slowdown in the higher-end affordable segment where loan conversion has seen a 30% drop in bookings.

On the company’s share performance, Ghazie expressed hope its upcoming eight-for-25 bonus issue would boost liquidity and create interest in the shares.

Thriven shares closed unchanged at 43 sen last Friday, with a market capitalisation of RM161.98 million.

This article first appeared in The Edge Financial Daily, on Aug 27, 2018.

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