CREDIT ANALYSIS REPORT

Guthrie Property Development Holding Bhd - 2006

Report ID 2417 Popularity 2131 views 34 downloads 
Report Date Nov 2006 Product  
Company / Issuer Sime Darby Property Berhad Sector Property
Price (RM)
Normal: RM500.00        
  Add to Cart
Rationale
The rating of Guthrie Property Development Holding Berhad’s (GPDH) RM750 Million Islamic Medium Term Notes Programme has been reaffirmed at AA-ID with a stable outlook, reflecting the Group’s strong financial position and commendable competitive position evident from the range of mix development offered, its track record and the sizeable land bank that the group possesses. The soft property market outlook however continues to put a damper on the rating.

Guthrie Property Development Holding Berhad (GPDH) was incorporated on 15 September 1973 under the name of Kumpulan Guthrie Holdings Sdn Bhd and assumed its present name in September 1990. GPDH is a 54.8% subsidiary of Kumpulan Guthrie Bhd (Guthrie) with the remaining 45.2% owned by Highlands & Lowlands Berhad (H&L) which in turn is a 54.5% subsidiary of Guthrie. GPDH is principally an investment holding company with subsidiaries mainly involved in property investment, property development, general construction and investment holding activities.
The primary development thrust of GPDH is its Guthrie Corridor Planned Communities (GCPC) comprising its maiden development, Bukit Jelutong (BJ) in Shah Alam which was launched in 1995, followed by Bukit Subang (BS) in 1998 and Denai Alam (DA) in 2005. GPDH expects to launch its remaining townships, Kota Elmina and Lagong Mas in the near future. The GCPC is spread over 11,500 acres, strategically located on the doorstep of the Multimedia Super Corridor. As at end March 2006, total sales value since the launch of BJ, BS, DA and Sungai Kapar Indah was RM3.3 billion with current sales collection totaling RM3.0 billion, while the total remaining gross development value (GDV) to be realized from its present and future developments stood at approximately RM4.6 billion. GPDH’s current land bank covers an area of about 5,660 acres. MARC is of the view that the diversity of GPDH’s developments and its huge land bank afford GPDH flexibility in its business strategies, enabling them to weather any weak property market sentiment thus affording them a distinct competitive advantage.

For FYE2005, GPDH’s profit before tax improved by 11.8% year on year to RM122.1 million on the back of decreased revenue of RM396.0 million (FYE2004: RM561.2 million). The decrease in revenue was due to the tapering revenue from its maturing property developments and fewer new launches in FY2005. New project launches are slated in 2006 and onwards. In the same period, operating margins have improved to 37.37% (FYE2004: 23.32%). Presently, the facility forms the company’s only borrowings, and this prudent policy has allowed GPDH to maintain a debt leverage of below one time, at 0.70 times in FYE2005 marginally lower from FY2004.
Related