LPN earmarks Bt4 bn for purchase of land, plans 12 projects this year

The company plans to launch 12 projects worth Bt20 billion this year, 11 of them in Bangkok and one in Cha-am, managing director Opas Sripayak said.
Half of the investment budget will come from the company’s internal cash flow, and the rest in project loans from commercial banks. This will maintain its debt-to-equity ratio at 0.6:1 this year, he said.
LPN targets revenue of Bt16 billion this year, up to Bt14 billion from its backlog of condos that will be transferred to customers this year, and the rest from new residential projects, he said. Currently, the company has a backlog worth Bt18.6 billion, Bt14 billion of which will be booked as revenue this year, and the rest in 2016.
LPN targets presales worth Bt20 billion this year from both existing and newly launched projects. It bases this target on indications that the economy will recover, after the overall property market declined by about 10 per cent last year compared with 2013.
Amid that decline, LPN’s presales last year missed the target of Bt20 billion, ending up at only Bt17 billion, Opas said. Meanwhile, only Bt11.7 billion worth of homes were transferred to buyers, lower than the early estimation of Bt15 billion, as banks tightened their mortgage lending.
“The company saw its mortgage-rejection rate increase from an average of 10 per cent to 15 per cent last year, especially for our condominium projects in the provinces, where the rejection rate was higher than in Bangkok,” he said.
Given the market trend, the company has revised its business plan to focus on Bangkok rather than upcountry. It will open only one project outside the capital, in Hua Hin, where there is demand from both Thai and foreign investors, he said.
Opas said he was confident that the property market this year would recover and his company would meet its presale and revenue targets.
In the first nine months of 2014, LPN Development recorded revenue of Bt8.5 billion and net profit of Bt1.2 billion.