Johor project will drive growth in current year

29 July 2006

Petaling Jaya: Crescendo Corp Bhd expects the Desa Cemerlang mixed development in Johor to be its main growth driver this financial year.

Speaking after the company's AGM yesterday, managing director Gooi Seong Lim said: ?We expect to sustain our performance this year but there is a softer market for residential property now due to higher interest rates.

But we are maintaining the margins on our shoplots.

The company's total land-bank of 3,100 acres is meant for short-to medium-term development. Of these, about 380 acres have been set aside to develop the Nusa Cemerlang Industrial Park (NCIP) and 1,390 acres for the upcoming Bandar Cemerlang.

NCIP, to be developed in three phases, is expected to be launch in the fourth quarter and would consist of 50 to 60 semi-detached and detached factory lots.

NCIP is partially targeted at the Singaporean market. For one, it is just a short drive away, and Singaporean market. For one, it is just a short drive away, and Singaporean businesses will be able to enjoy lower labour costs, Gooi said.

Sales of NCIP lots, sited on freehold land, are expected to be a significant contributor to revenue in the next financial year.

Crescendo hopes to develop Bandar Cemerlang, a project with RM2.5bil in gross in gross development value, into a self-contained township in one to two years.

The company plans to embark on a build-then-sell plan for residential properties there. "We want to build until the properties are about half-way completed before marketing them as people now prefer to buy what they can physically see," Gooi said.

He said excess supply of homes was affecting the property market in Johor, but hoped to see the situation improve soon.

"The market is bearish but will rebound in the next two years as its fate is tied to that of Singapore. As Singapore will be building more integrated resorts, it will likely employ Johor residents as well," Gooi said.

On its construction business, he said the company was considering pursuing some projects related to the Ninth Malaysian Plan, but would make a decision only in 2007.

Crescendo's manufacturing business will also undergo an expansion this year as it will build a factory to supply ready-mixed culverts for in-house uses.

Crescendo's net profit for the financial year ended Jan 31, 2006 rose 14.4% to RM18.7mil compared with the previous financial year.

For the first quarter ended April 30, the company registered net profit of RM3.4mil on revenue of RM17.6mil. Earning per share was 2.23 sen.  

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