Management Discussion and Analysis FINANCIAL & OPERATIONS REVIEW
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LBS BINA GROUP BERHAD LBS BINA GROUP BERHAD Management Discussion And Analysis FINANCIAL & OPERATIONS REVIEW 48 TAN SRI DATO’ SRI LIM HOCK SAN PSM, SSAP, DSSA, JP Group Managing Director of LBS Bina Group Berhad, Non-Independent Executive Director SEGMENTAL REVIEW The Group’s operating business segments are broadly categorised into: Property Construction Motor racing Management, development and trading circuit investment and others The information in this management discussion and analysis should be read in conjunction with the Company’s consolidated financial statements and the notes related thereto. The discussion of results, causes and trends should not be construed to imply any conclusions that such results, causes or trends will necessarily continue in the future. ANNUAL REPORT 2019 LBS BINA GROUP BERHAD Property Development “LBS builds homes that meet the needs of Malaysians. Being Malaysia’s prominent township builder, LBS has carefully nurtured a reputation for delivering properties that inspire individuals and enrich communities. By insisting on continually improving not only the construction FINANCIAL & OPERATIONS REVIEW FINANCIAL & OPERATIONS technologies and architectural trends, but also empowering individuals as well as enhancing communities, LBS lives up to its belief that Malaysians deserve houses that they can call homes. ” Our product range encompasses high rise apartments, landed homes - from single storey terraced house to triple storey bungalow, commercial units; with design and construction blending tradition with innovation, creating spaces and developments with contemporary living standards. Our people are experienced and skilled across a range of fields, from land acquisition, planning, design, surveying, engineering, purchasing, construction, sales and marketing, public relations and communication, as well as customer service. 49 Actual view: D' Island Residence ANNUAL REPORT 2019 LBS BINA GROUP BERHAD LBS BINA GROUP BERHAD Management Discussion And Analysis (Cont’d) Driving Value Delivery by LBS We have the skills, Continuous replenishing experience and financial strategy in land banking flexibility to execute the drives the returns over the most value-enhancing asset business cycle. selection, either through outright acquisition or joint FINANCIAL & venture with the landowners. LAND BANKING OPERATIONS Mordern homes Our building design trend DESIGNING constructed to leans toward the simple a high standard and practical, yet it ofers using innovative comfortable environment technologies, that reflects the modern REVIEW cutting edge lifestyle. specification and latest architectural trends. Our BUILDING Strategies 50 Efcient and cost efective, built to a high standard while creating strong relationships with authorities, suppliers SELLING and contractors. DELIVERING Providing positive sales and Satisfied and happy enhancing customer care customers bring clientele experience. diversification, brand attestation and repeat sales. Timely delivery of quality Quality homes delivered at homes at afordable price. afordable and reasonable price. ANNUAL REPORT 2019 LBS BINA GROUP BERHAD LBS BINA GROUP BERHAD CREATING VALUE ACROSS THE DEVELOPMENT CYCLE Our value creation business model, with competitive advantage across all the fields we operate, set up to deliver a sustainable performance across the cycle. Strategies Efect and advantages 2019 activities LAND BANKING Land or project acquisition opportunities Lands at strategic location helps We have been stringent in our land are identified by our Management to augment our land bank and banking replenishment initiatives to using their knowledge and contacts. A complements our strategy of growth. ensure the sustainability of the business REVIEW FINANCIAL & OPERATIONS feasibility assessment is prepared by the and to provide a cushion for any Project Department, which is reviewed at Development via joint venture is unexpected future cost escalation; this is Top Management level before submitting expected to lower our upfront cost also to reserve our war chest for critical it to the Board, where the final decision is and give greater flexibility in timing business environment. In 2019, we have made. for launches and fixing types of acquired approximately 6.5 acres (2018: properties. Nil) of land through joint venture with the Land acquisitions or joint venture projects landowners. These land are next to our are considered against a series of criteria, existing project land in Batu Pahat. such as gross margin, forecast sales rates, location and planning prognosis. Total land bank for future development recorded was approximately 3,610 acres as at 31.05.2020 with estimated Gross Development Value (“GDV”) of RM33.0 billion, which would enable the Group to have sufcient capacity for future growth. 51 DESIGNING Designing appropriate range of products Good product quality enhances We constantly review on the layouts at reasonable price to cater to the customer satisfaction and ultimately that demonstrated savings in design and diferent income group. our LBS Brand, which enhance construction costs. our ability to sell the properties we Simple and practical are the key focus in develop. We design our products to be attractive to designing process in terms of space and a wider and growing range of customers. materials used. Actively monitoring and positioning our Undertaking research to ensure we know brand and ofering to appeal to a broad our customers and their preferences. range of customers. ANNUAL REPORT 2019 LBS BINA GROUP BERHAD LBS BINA GROUP BERHAD Management Discussion And Analysis (Cont’d) Strategies Efect and advantages 2019 activities BUILDING We strive to maintain long-term Having suitable materials at Major building materials in the working relationships with reputable competitive prices enables us to meet construction process, such as bricks, sub-contractors to reduce health and our growth aspirations, helps support steels, cements and lintels are subjected safety risks and ensure the quality of our our margin and brings better control to our bulk purchasing arrangements, product. over the cost. ensuring consistently high quality at competitive prices. We seek to make sure that we have It is important to have high standards FINANCIAL & suitable building materials available of health and safety on our sites Our properties were regularly inspected at competitive prices to enable us to to create the appropriate working during the construction process both construct properties to the required environment to deliver a good quality by in-house management and the standards expected of us by our product. consultants to ensure that building customers, within budget and on time. standards were achieved. OPERATIONS Our main contractor, MGB Berhad (“MGB”), which is also our subsidiary listed on the Main Market of Bursa Malaysia, has invested in Industrialised Building System (IBS) on the prefabrication and REVIEW precast construction techniques. This IBS has efectively reduced construction workforce and construction time. SELLING 52 We aspire to sell properties that Good customer care and services help We continue to innovate our approaches are desirable and afordable for our to perpetuate a positive reputation for and enhance our processes to further customers. the Group and assists in generating improve on sales and customer care further sales through individual performance through training and The satisfaction of our purchasers is recommendation. educating staf, particularly those in the important to us as this can ultimately front lines facing the customers. determine the success of our business. Our regular customer survey and We aim to deliver a positive experience feedback help to enable us to measure to our customers, from sales until the our service and direct our attention. delivery of vacant possession. DELIVERING We strive to deliver the property on Timely delivery of completed units to We continue to deliver completed units schedule. purchasers will smoothen the cash to the purchasers on time. flow position and avoid Liquidated Ascertained Damages (LAD) and negative corporate image. ANNUAL REPORT 2019 LBS BINA GROUP BERHAD LBS BINA GROUP BERHAD OUR LANDBANK The Group has a total undeveloped land bank of 3,610 acres and the breakdown by geographical area is as follows: - Landbank for future development Future GDV 5% 2% 2% 12% 45% Selangor/KL 13% 54% Pahang 29% 38% Perak FINANCIAL & OPERATIONS REVIEW FINANCIAL & OPERATIONS Johor Sabah 3,610 acres RM33.0 Billion OUR PRESENCE PERAK CAMERON HIGHLANDS KUANTAN KOTA KINABALU, SABAH • Chemor land • Cameron Centrum • Sinaran Mahkota • Celebrity Residence • Jelapang Maju Industrial • Golden Hills Park • Taman Royal Lily • Puncak Jelapang Maju • Tengkolok land • Kinta, Ipoh • Kampung Raja land • Kampar 53 SELANGOR/KL PUCHONG GENTING HIGHLANDS JOHOR BAHRU BATU PAHAT • Alam Perdana • Bandar Saujana • Midhills • Johor CBD • Bandar Putera • Alam Awana Putra • Midhills 2 • Danga Bay Indah • Bukit Jalil • D’Island Residence • Kulai • Seri Kembangan • Skylake Residence • Telok Gong • Desiran Bayu • Bukit Cherakah ANNUAL REPORT 2019 LBS BINA GROUP BERHAD LBS BINA GROUP BERHAD Management Discussion And Analysis (Cont’d) OUR BUSINESS MODEL 1 LAND BANKING • Joint venture with strategic 5 partners • Strategic location 2 FINANCIAL & • Feasibility study • Long and short term planning DELIVERING DESIGNING • Timely deliver • Optimal use of space OPERATIONS • Handling defects • Cost efciency and complaints • Modern & creative • Gather feedback