OXLEY: Has S$3 billion in unbilled sales; record profit expected in FY17

Big investor turnout at Oxley's FY2016 results briefing yesterday. Photo by Sim Kih
Oxley Holdings (OHL SP) reported FY16 net profit of S$206m (+162%), driven by progressive revenue recognition from 8 of its residential and mixed development projects in Singapore.

Revenue of S$981m was the second highest on record, with contributions from major projects such as NEWest, KAP & KAP Residences and The Rise @ Oxley. 

Going forward, Oxley has another $1.2bn of unbilled sales from its Singapore portfolio, including $500m from Oxley Towers at Robinson Road, which can only be recognised upon completion.

While sales from Singapore were the key driver in FY16, we expect the group’s overseas projects to feature more prominently going forward. Of the group’s current S$3bn unbilled sales, 60% are from overseas markets such as UK and Cambodia.

The group has started to hand over units to buyers at its massive Royal Wharf development in London and with a sales backlog of $1.6bn, profit recognition would stretch over the next 2-3 years as units are progressively handed over.

Oxley executive chairman and CEO Ching Chiat Kwong at a FY16 results briefing yesterday. Photo: Sim KihMeanwhile, the group is targeting new launches in Malaysia (Oxley Towers KLCC), Myanmar (Min Residences) and Indonesia (Batam Convention Centre) in the next 2 quarters, while sales are continuing at The Bridge (commercial units) and the Peak (residential) in Cambodia.

The group’s net gearing has fallen from 2.7x to 2.3x in the last 12 months, and we project this to decline to 1.5x by end FY17 as cash continues to pour in from Royal Wharf and its Singapore projects.

We expect $1.9bn worth of projects receiving T.O.P. in the next 12 months, and this will underpin a record year in FY17 with net profit of $350-360m.

Oxley remains one of our top picks in the property sector, and we maintain our BUY recommendation with a revised TP of SGD0.85.

Oxley’s award-winning Royal Wharf project in London along the River Thames. Artist's impression