MKH Annual Report 2017

Segment results and analysis Property Development and Construction This segment has been and continues to be the mainstay of the Group’s operations. Its key projects are located in Kajang, Selangor and the Greater Klang Valley and with 14 development projects in place, new sales garnered for the financial year under review amounted to RM808.1 million as compared to RM776.1 million in the preceding year. The key projects, namely Hillpark Home 3, Kajang East, Hillpark @ Shah Alam North, Hillpark Residence and TR Residence chalked up a hefty RM758.2 million, making up 93.8% of total new sales for the year under review. Whilst new sales locked in for the year showed a marginal increase of 4.0% over last year’s new sales, segment revenue and pre-tax profit decreased by 24.6% and 30.8% compared to the preceding year largely due to the following: • Tail-end completion of projects, including handover of vacant possession of 4 significant completed projects; • Ongoing and newly launched projects at end of the last financial year were still at preliminary stage of development; • Slower progress of work was experienced at one of the projects; and • Receipt of a one-off project grant from the Government amounting to RM 11.7 million last year – there was no such grant for the financial year under review. The strategic thrust of this division is residential development with greater focus on affordable housing to reach out to the masses. As at 30 September 2017, the gross development value of 10 ongoing projects amounted to approximately RM2.28 billion with unbilled sales totalling RM926.5 million (2016: RM801.0 million). With available resources at its disposal, the Group is well positioned and poised to unlock the value of its existing development landbank in Kuala Lumpur, Kajang, Semenyih and Shah Alam vicinities. The Group has planned launches for the next financial year 2018 with an estimated launch gross development value of approximately RM 1.13 billion. Whilst the division faces competition from other players in the market, the Group is confident of overcoming the challenges by focusing on the niche market of affordable homes, quality of its products and timely delivery of its commitments. 22 MKH Berhad • Annual Report 2017 Hillpark @ Shah Alam North is an ongoing 558-acre integrated township development Management Discussion and Analysis Report Artist’s Impression Artist’s Impression Artist’s Impression