“Talaat Moustafa Holding Group” invited its shareholders to attend the Ordinary General Assembly on March 28; To consider the proposed dividend account for the previous year.
The General Assembly will consider approving the company’s financial statements for 2020, and the report of the Board of Directors and the auditor on the company’s activity during the past year.
The board of directors of Talaat Mostafa Group Holding Company suggested making cash dividends to shareholders for the profits of last year 2020, by 0.145 pounds per share, with a total value of 300 million pounds.
The profits of “Talaat Moustafa Holding Group” decreased by 10.7% during the past year to reach 1.67 billion pounds, compared to a net profit of 1.87 billion pounds during the previous year 2019, taking into account the rights of the minority shareholders.
While the company’s revenues increased during the past year 2020 by 20% to reach 14.1 billion pounds, compared to total sales of 11.74 billion pounds in the previous year.
The group attributed the increase in revenues mainly to the deal amounting to nearly 4 billion pounds, which resulted from the strategic alliance with both the National Bank of Egypt and Banque Misr to develop 341,000 square meters of land located in the cities of Al-Rehab and Madinaty.
She pointed out that this deal enabled Talaat Moustafa Group to absorb the impact of the decrease in the revenues generated from the hotel activity resulting from the effects of the Covid-19 pandemic.
The balance of units sold but not delivered to customers on December 31, reached an amount of approximately 50.7 billion pounds compared to 49.5 billion pounds during the same period last year, which resulted from the continuous development of the group’s selling strategy.
She explained that this provides a clear view of future cash flows and profits, as this balance of the units sold will be recognized as revenue in the income statement for the delivery of those units according to the delivery schedule during the period from 2021 to 2024.
Talaat Mostafa Group achieved real estate sales during the year 2020 by about 16.6 billion pounds, despite the impact of the precautionary measures that were imposed starting from March 2020 and the related measures that affected the movements and dealings of customers.
While the total profit decreased during the same period to 4.11 billion pounds, compared to 4.51 billion pounds in the same period in 2019.
In terms of independent businesses, the profits of Talaat Moustafa Group increased in 2020 to 487.1 million pounds, compared to 471.1 million pounds in the comparative year 2019.
While revenues declined during the same period to 579 million pounds compared to 1.16 billion pounds in the same period in 2019.
The basic share of earnings per share was 0.23 pounds, compared to 0.23 pounds in 2019.
A report issued by the research unit of the investment bank CI Capital said that the residential city project that Talaat Mostafa Group intends to implement in the Capital Gardens raises its assessment of the target price of the group’s share by 50%, equivalent to 7.50 pounds per share.
CI Capital expected that the sales of housing units in the project (equivalent to about 88% of the land balance) would record about 787 billion pounds, which could add about 3.65 pounds per share to assess the target price. About 8% of the project has been allocated to sales and leasing of non-residential units (equivalent to about 110 billion pounds), which adds 3.85 pounds per share to assess the target price. The remaining 4% was allocated to services.
She added that the successful launch of the project in 2021, in line with the plan, places it at the forefront of the factors that support the growth of the company, which supports contracted sales by about 50% annually during the next five years and by 70% after that. It expected the project to achieve negative operating cash flows during the first six years of its launch, despite it being a relatively slight decline, mainly due to the payment of the land value of 4 billion pounds in cash. It expects the potential return to increase by more than 100% compared to the current market price.
She pointed out that the concerns and risks related to the project include the risks of a decline in the market share in light of the concentration of the project in the East Cairo region, and the increase in competition, as the Egyptian government is offering a larger number of lands.
On the other hand, she indicated that there are advantages such as offering many technological services, and extending the payment plans to reach between 13 and 15 years compared to the current payment plans that extend for 10 years. TCI Capital said that the possibility of needing to finance the early stages of the project may represent another risk factor, but indicated that the company could, in light of the current low indebtedness, obtain more loans.
Talaat Moustafa Group had signed an agreement to purchase a land of approximately 21 million square meters with the New Urban Communities Authority. The plot of land is located on the opposite side of the New Administrative Capital, on the Suez Road, in the city of Capital Gardens, near the current projects of the company, the cities of Al-Rehab and the cities of Celia in eastern Cairo.
The company estimates the value of sales of housing units for the project at about 826 billion pounds, and non-residential sales at about 58 billion pounds, and investment costs are estimated at about 500 billion pounds. The project will include 140,000 residential units, in addition to commercial and retail spaces, medical and educational projects, a sports club and a 5-star hotel, all of which are located in a smart city. The value of the land will be paid in cash and in kind, with a total value of approximately 44 billion pounds.) The project is scheduled to be launched this year.
CI Capital added that the purchase of the land adds 20 years to the life of the group’s land balance.
The purchase of the aforementioned plot of land comes in accordance with the acquisition criteria previously announced by the group, which is the size, that the area is large enough to accommodate an integrated city, and the location, east of Cairo, which is better in terms of growth opportunities, and payment terms, are often in kind, to ensure Better cash flow and risk management.
In-kind payment will be made about 9.5% of the permitted building area for residential units, about 40 billion pounds, in addition to cash payment of about 4 billion pounds, which will be in the form of four equal annual installments starting from 2021.
CI Capital said that this reflects an undiscounted value of approximately 2.1 thousand pounds per square meter and a discounted value of about 1.3 thousand pounds per square meter according to company management estimates, or about 444 pounds per square meter according to CI Capital’s calculations.
The investment bank considered that the deal is good in light of the long track record of Talaat Moustafa Group in establishing integrated cities in the new areas, and the huge size of the plot, which is equivalent to 10 times the area of the Celia project.
The article March 28 … Talaat Moustafa’s general assembly looking at dividends for 2020 was written in Al-Borsa newspaper.