Millennium Housing Developers growth on upward trend: Broker
Tuesday, 28 January 2014 00:29
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Softlogic Stockbrokers Ltd. is forecasting Millennium Housing Developers Ltd. (MHDL) to post earnings of Rs. 99 million in the Financial Year ending 31 March 2014 given the upward trend in its growth.
In FY13, the company’s net profit was Rs. 97 million. Revenue forecast for 2014 is Rs. 662 million, up from Rs. 561 million in the previous year.
MHDL is in the market with its Initial Public Offering (IPO). The company is issuing 32 million shares at Rs. 6 each with a bid to raise Rs. 192 million. The IPO comprises of two tranches of 16 million each. The second tranche will be pursued in the event of the original amount is oversubscribed. The company will be listed on the Diri Savi Board.
In giving analyst’s view, Softlogic said following the downturn in FY10 the MHDL Group’s growth has been on an upward trend backed by increasing number of housing units sold each year recording a CAGR of 5.4% FY10-13.
“We expect a further 6% growth in housing units in FY14E. However with competition in the industry we expect NP margins to be around the 15% mark compared to 17% in FY13. We expect Millennium Housing Developers to record earnings of LKR99mn for FY14E. Inclusive of the new shares in issue at Rs. 6, the company would be trading at 9.1x FY14E earnings,” Softlogic Stockbrokers said.
Millennium Housing Developers Limited (MHDL) is a 77% owned subsidiary of Nation Lanka Finance PLC. The company which was incorporated in 1998 was formally known as Ceylinco Developers Ltd.
MHDL pioneered in mega township development projects with the emphasis to target the needs of the low and medium income earners. The mega township projects run under the company’s flagship brand ‘Millennium City’.
Millennium Housing Ltd. currently operates in Ja-Ela and Piliyandala properties and is responsible for constructing the Heartland category of houses whilst Millennium Villa Housing Development Ltd. is responsible for ‘Villa’ branded houses that were introduced in the Ja-Ela property.
Funds raised from IPO will be used to finance the pipeline of housing projects of the company. At present it has completed 2,236 housing units (inclusive of 1,600 in Athugiriya) and plans to increase it to 2,803 by 2018. Future projects include those in Wattala, Seeduwa, and Homagama in addition to expansion in Ja-Ela, Athugiriya and Piliyandala.
