Pruksa learns lessons from the flood crisis

“We learned from the flood that we had to manage our finances and [operations] to support business growth and also [ensure] safety if hit by another crisis like last year’s,” director and chief business officer Prasert Taedullayasatit said in an interview with The Nation.
The flooding hit as many as 100 of Pruksa’s residential projects. The company then recovered, showing presales of Bt21.5 billion in the first 10 months of this year, or about 74 per cent of its full-year presale target of Bt29 billion. This recovery was faster than estimated thanks to the company’s business strategy set up five years ago to expand its customer base.
Pruksa also maintains a strict financial policy, keeping its debt-to-equity ratio between 1.5:1 and 2:1, so that it is flexible enough to keep operating during a crisis.
Meanwhile, the company revised its management system, including procurements and construction, and suspended its investments last year. “All of that helped us recover faster than estimated and enjoy healthy growth this year and into next year,” he said.

MAINTAINING GROWTH
Since the recovery, Prasert said the company believed that it was now financially healthy and ready to grow in the long term.
“We target revenue of Bt26 billion this year, the highest in our business history since we were established in 1993,” he said.
It targets revenue growth next year of 30 per cent. Up to 70 per cent of its revenue will come from detached houses and townhouse projects and the rest from condominiums.
The company’s objective is to maintain its market share in low-rise homes at no less than 15 per cent in Bangkok and the suburbs.
Meanwhile, Pruksa’s net profit next year is targeted at 14-15 per cent of revenue, or Bt5 billion.
The company will benefit from transfers of its condominium |projects to customers worth Bt10billion, while booking marketing and construction costs from 2011-2012.
The bottom line will be net profit in 2013 that is better than this year’s.
The company also has a business plan for 2013-2015 to maintain its debt-to-equity ratio between 1:1 and 1.25:1.
“Our debts now are long-term, between three and a half and five years. This is the best solution for both business expansion and facing crises,” he said.
 
BRAND BUILDING
Now that it has returned to financial strength, Prasert said the company would concentrate on building its corporate brand next year and has appointed Creative Juice and Y&R (Thailand) as its advisers.
“Most of our customers know us from our products’ brands, but we want to build our corporate brand to be in the minds of our customers in the future. This is the new challenge for our business in 2013,” he said.