MK Real Estate banks on boost from townhouses

Assistant managing director Chutima Tangmatitham yesterday said the company planned to open presales for the second phase of two townhouse projects - Chua Chuan Island and Chua Chuan Petchkasem 81 - worth Bt360 million and Bt355 million, respectively.

"We decided to open townhouse projects this year, the first time since the financial crisis of 1997, because we saw strong demand for this segment," she said.

Although the gross margin for townhouses is lower than that for detached houses, MK Real Estate believes townhouse projects will drive its revenue to meet the target of Bt2.4 billion for the year, she added.

At present, the company has a backlog worth Bt800 million of presales for projects waiting to be transferred to customers.

Meanwhile, MK Real Estate plans to launch its latest detached-housing project worth Bt600 million on Sirinthorn Road in the final quarter of the year.

The company will also launch a detached-housing project worth Bt1.2 billion on Chaeng Wattana Road in the first quarter of next year.

MK Real Estate expects to keep its gross margin at between 38 and 40 per cent this year, which is higher than last year, Chutima said.

It announced revenue of Bt752.54 million and net profit of Bt168.74 million for the first quarter, up 119.73 per cent and 316.66 per cent year on year, respectively.

The company's financial results in the current quarter may, however, be lower because most home-buyers had sped up the transfer of units before March 28, out of concern over whether the government would extend tax incentives for residential projects.

However, the company will launch a promotional campaign in a bid to boost second-quarter sales to the same level as in the first three months of the year, she said.

Chutima added that the company had succeeded in buying stock back from minor shareholders, falling only 1 million shares short of the targeted 85 million because of a recent rise in its stock price.

"If the share price drops, we have enough cash to buy back to meet the target," she said.

MK Real Estate's share price closed at Bt1.97 yesterday, up 2.07 per cent from Friday.