PropNex earns record revenue for FY2022
PropNex has reported earnings of $17.8 million for 4QFY2022, which ended Dec 31 last year, 24.5% higher than the earnings of $14.3 million recorded the previous year. This brings the group’s earnings for FY2022 to $62.4 million, 3.9% higher y-o-y.
For 4QFY2022, PropNex achieved revenue totalling $293.4 million, a quarterly record. For the full-year, revenue clocked in at $1.03 billion, up 7.5% y-o-y and surpassing the $1 billion mark for the first time.
The revenue growth was due to increased commission income from agency services, which surged $121.4 million or 23.4% y-o-y to $640.6 million. PropNex attributes the increase to a robust residential resale and rental market. Revenue growth was partially offset by a decrease in commission income from project marketing services of approximately $51.8 million.
Gross profit for FY2022 increased by 2.8% y-o-y to $104.7 million in tandem with the revenue increase. Meanwhile, other income increased by 131.1% y-o-y to $16.1 million due to the derecognition of trade payables to agents of approximately $7.8 million and an increase in advertising and marketing income by approximately $1.9 million.
Earnings per share (EPS) for 4QFY2022 and FY2022 stood at 4.80 cents and 16.85 cents, respectively. “We have wrapped up the year with a record full-year revenue posted in PropNex’s history,” says Ismail Gafoor, co-founder, executive chairman and CEO of PropNex. Despite limited new project launches and a decline in home price growth in 4Q2022, he adds that PropNex has “managed to turn in a healthy set of results following improvements in both the Covid-19 situation and the overall economy.”
A final dividend of 8 cents per share has been proposed, payable on May 12. This brings the total dividend for FY2022 to 13.5 cents per share or 80% of the group’s FY2022 earnings. The group has proposed undertaking a bonus issue where one bonus share will be credited as fully paid per every existing PropNex share held. Up to 370 million new ordinary shares will be issued to PropNex’s shareholders with the proposed issue.
This is the first bonus share issue undertaken by PropNex and was done to encourage trading liquidity and broaden the distribution of PropNex’s shares, adds Gafoor. Looking forward, he believes buying interest will remain resilient following the successful launch of Sceneca Residences in Tanah Merah Kechil Link early this year and a healthy pipeline of new launches in 2023.
PropNex expects overall private home prices to rise by 5% to 6% in 2023, easing from the 8.6% increase in 2022, given the high land cost and rising construction cost faced by developers. Demand for HDB resale flats is also expected to remain stable, with the group projecting 28,000 to 30,000 flats could be resold this year following the Budget 2023 announcement on Feb 14 on the additional CPF housing grants given for first-time buyers.
“Higher grants for two- to four-room HDB flats will encourage right-sizing homes, potentially easing demand for five-room or larger flats. Conversely, this could spur demand for resale flats given tight market supply, thereby keeping prices firm,” says Gafoor.
He adds that other budget measures, such as the increase in buyer’s stamp duty for higher-value residential and non-residential properties, should not impact home sales significantly and “should be manageable for buyers of homes priced over $1.5 million and $3 million.”
As of Jan 1, PropNex remains Singapore’s largest real estate agency, with 11,667 salespersons. This represents a y-o-y increase of 8%.