LBS Bina revises down FY20 sales target to RM1b in view of Covid-19 but stays optimistic on prospects

KUALA LUMPUR (July 27): LBS Bina Group Bhd has lowered its sales target to RM1 billion for the financial year 2020, from RM1.6 billion announced earlier, as it takes into account the impact of the Covid-19 outbreak, but remains positive it could surpass its target should economic conditions improve.

Group managing director Tan Sri Lim Hock San said the property developer reviewed its sales target in April following the implementation of the government’s movement control order (MCO) which had impacted consumer spending amidst a weaker economic climate.

However, following the loosening of the MCO and reopening of the economy, sales momentum had picked up, said Lim.

“Up to yesterday we have achieved RM780 million in sales. Looking at the momentum of the sales over the past few months, coupled with lower interest rates and the government’s Home Ownership Campaign, we expect we can be able to surpass the target of RM1 billion,” Lim told reporters after the group’s annual general meeting here.

Meanwhile, total unbilled sales as at July 15, 2020 stood at RM2 billion, which Lim said can be translated into earnings in the next two to three years.

“To date, LBS Bina has a total of 15 ongoing projects with an estimated gross development value (GDV) of RM4.3 billion. As at June 30, 2020, LBS Bina owns future landbank of 3,591 acres. This land bank is projected to keep the company busy for the next 10 to 15 years," Lim added.

With a focus on affordable housing, LBS Bina plans to launch properties with a combined GDV of RM3 billion in the next nine months.

In the pipeline are, among others, new projects and phases at its KITA @ Cybersouth development and Bandar Puncak Alam in Selangor, as well as developments in Pahang and Johor.

Over the past three years, LBS Bina has handed over 5,526 properties. In 2020 and 2021, it aims to hand over a total of 7,181 units.

On prospects, Lim said the property development sector will bounce back from the negative impact of Covid-19 in due course as home ownership will continue to be prioritised by consumers.

“I believe the property segment will come back in the near future because people still need homes, and with the interest rate lowered, the industry should be able to recover by end of the year or early next year. Based on our selling trends, we can see the market demand is there,” he said.

At midday break, shares of LBS Bina settled 0.5 sen or 1.41% higher at 36 sen, with a market capitalisation of RM553.4 million.