June 25, 2015

Robinsons Land Corp (RLC) Homes eyes P1.5b in sales in FY15

The horizontal hosing development arm of Robinsons Land Corp (RLC) is looking to generate P1.5b in sales this fiscal year (ending 30 Sept), showing a flat growth from ast year. In an interview with BusinessWorld, the RLC Homes general manager said that the unit will match last year’s sales, given the growth momentum exhibited in its operations in Visayas and Mindanao. Aside from lot sales, the unit will be offering home model units in its projects in General Santos, Palawan, Bacolod and Bulacan through the three newly-created sub-brands.

Our take: The P1.5b sales target is just a notch over our P1.4b estimated sales of Robinsons Homes this year. By our estimate, the unit will account for just 16% of reservation sales this year.

However, it will outpace overall reservation sales which we estimate to fall by 6% this year given that RLC has deferred to later this year the re-launch of some P6b worth of projects for its higher-end brands related to the change in its plans for a major residential project in Ortigas Center.

The re-relaunch of this residential project should help drive overall reservation sales growth next year (+11 by our estimates) and should coincide with the full-year contribution of the two new BPO office buildings as well as the new malls launched within this year.

As such, we view FY16 as a growth year for RLC during which we expect earnings to grow by 21%, one of the highest among the property companies under our coverage. Given that we value RLC’s investment assets by applying various cap rates on their revenue contribution, our overall NAV estimate should also expand by 14% to P42.76/sh. – WealthSec