Since its initial public offering in mid-2013, property developer Matrix Concepts Holdings Bhd had caught the eye of analysts and the investing fraternity. What sparked their interest is because the company’s share price has been on an upward trajectory, having more than doubled since its debut.
While its share price has gained only about 20% since end-2015, it has been paying out more than 40% of earnings as dividend in recent years.
In FY2018 ended March 31, the developer paid out four quarterly net dividend payments — two payouts of 3.25 sen and another two amounting to 3.50 sen per share respectively — bringing the total dividend payout to 13.5 sen or RM95.9 million, which was 21.2% higher than FY2017, and 45% of FY2018 net profit.
In FY2017, its net dividend payout was 13.75 sen per share or RM79.1 million, which works out to 42.7% of net profit for FY2017. For the 15 months ending March 2016, Matrix Concepts paid out 19.4 sen in dividends or RM104.3 million, amounting to 40% of net profit for the year.
Better dividend payments came with steady earnings. In FY2018, the company posted revenue of RM818.48 million, 5.61% higher than the previous financial year, while net profit came in at RM213.28 million, up 15.11% from 2017. For its 15 months ended March 2016, it chalked up a net profit of RM260.85 million from RM912.20 million in revenue.
According to its annual report, return on equity for FY2018 was 17.7%, down from 18.1% in 2017 and 29.5% for the 15-month period ending March 2016.
Nonetheless, based on The Edge BRC award calculations, Matrix Concept’s weighted ROE over three years came in well above 12 other peers in the Property (below RM3 billon market capitalisation) sector.
The first half of the current financial year ending March 31, 2019 (FY2019), has remained decent. Net profit came in at RM103.09 million, up about 6% from RM97.38 million in the previous corresponding period, even as revenue grew 28.6% to RM483.35 million from RM375.75 million.
Recognition of numbers from its M.Carnegie boutique apartment project in Melbourne, Australia, and increased revenue contribution from the sales of industrial properties at Bandar Sri Sendayan in Seremban, Negeri Sembilan contributed to the year-on-year gains and helped offset lower revenue contribution from Bandar Seri Impian in Kluang, Johor, due to delayed launches. The group’s investment properties — Matrix Global Schools, d’Tempat Country Club and d’Sora Business Boutique Hotel — also contributed more revenue with higher student enrolment, increased spending by club members and better hotel occupancy rates.
As at Sept 30, 2018, the group had about 1,405 acres of undeveloped land bank while unbilled sales grew to RM1.4 billion compared with RM1.1 billion a year ago. It has set an internal target to own 2,500 acres of land bank by 2020.
The group’s ongoing developments have a gross development value (GDV) of RM2.8 billion as at Sept 30, 2018, compared with RM2.4 billion a year ago.
In notes accompanying its 2QFY2019 results, Matrix Concepts said it “maintains a positive outlook on demand for its properties, and has sustained its strong track record and sales performance”. To satisfy buyers’ demand for affordable-yet-quality homes, the developer plans to launch projects with a total GDV of RM1.7 billion for the current financial year ending March 31, 2019 (FY2019). Of this, the group had successfully launched RM807.3 million worth of residential projects as at Sept 30, namely Ara Sendayan (Phase 3) and Tiara Sendayan 1 and 2 in Bandar Sri Sendayan (BSS), and Chambers KL in Jalan Putra — its first residential high-rise condominium and maiden foray in the Kuala Lumpur city centre.
“For the remaining six months of FY2019, the group’s upcoming launches amount to RM900 million in GDV, including Tiara Sendayan 3 and 4 and Ara Sendayan (Phase 4) in BSS, and Impiana Bayu 3A in Bandar Seri Impian. Overall, the group is confident that its profitability will be sustained with the healthy amount of new launches and sales progress of ongoing developments,” it said.
At the time of writing, all three analysts covering Matrix have a “buy” recommendation, with target prices ranging from RM2.21 to RM2.50, averaging at RM2.37, Bloomberg data shows.