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"Bertam Properties has continued to establish profitable developments, even during the recent challenging market conditions, and is expected to add substantial value to the 70 hectares it has purchased for development, with the Group reaping its share of the benefit."
I think that means the profit from privilege, from the grant of planning permission for a change of use in the land, from the stripping out of the economic rent, is still to come. I think that means the share of profits from associates in the next few years, in particular from 40% owned Bertam Properties, is going to be a lot higher than we have been accustomed to.
Arsenal, "I have spent lots of time in Penang over the last ten years" Well, you are very lucky. I was last there 41 years ago! Yes, the land ownership rules seem very discriminatory - Mdm Lim's Anglo-Eastern only holds Cenderung on a lease, I believe. It's their only Malaysia-based plantation. I presume we only held the Bertam land freehold because of our ownership pre-dating independence, not that the same sort of rackets don't go on here in the UK what with planning authorities only giving planning permission on green field sites in national parks to build a residential property only in very exceptional circumstances, never to developers, but sometimes to favoured locals. The land value uplift can be £150,000.
A local sheltered accommodation provider 'charity' got planning permission to build a home in a field occupied by grazing sheep, and the rents charged to the human residents reflected the value of the property and land AFTER it was built. I imagine the planning permission application was advanced by stating the residents would be offered low priced accommodation. How did the planning application succeed? It helped to have a royal cipher on the application. Charities are just as aggressive at growing their 'businesses' as real businesses, and getting a £1m uplift in the land value by buying agricultural land and changing it to residential use must have done wonders for the balance sheet of that 'charity'. I guess one shouldn't criticise the rules in Malaysia as similar, less overt practices probably go on here. I recall Judy Murray having a tennis court planning application turned down on the grounds the tennis courts, which were in the back of beyond in Scotland somewhere, would cause too much light pollution - I wonder if the Planning Committee was jealous at the amount of money she was going to make from floodlit tennis courts in use 24/7? Planning authorities don't like giving away risk free profits, do they? The Town and Country Planning Act of 1947 was the biggest theft by a UK Government ever, I wonder?
Nobull
I know the rules for the Malay are hugely one sided to them
I have spent lots of time in Penang over the last ten years
The Chinese and Indians will get control in the next decade !!
This company cannot stay independent much longer IMHO
Arsenal58, yes but it makes a huge difference: scenario 1: we got the planning permission and then sold the land means we have already stripped out 100% of the economic rent, and it's already included in that $24m land sale figure, or scenario 2: our 40% owned property development property company gets the planning permission meaning we only get 40% of the economic rent stripped out and more importantly meaning the profit is still yet to materialise via some lumpy, futures "shares of associated company profits"
I doubt we would be allowed to keep 100% of the economic rent stripped out from a change of use in the land. So I believe we will only get 40% and that it is still to come simply because the Malaysian government has a policy to steer economic rents, profits from privilege, to Malaysian Malays, never to Malaysian Chinese or Malaysian Indians, so I can't imagine they would ever allow non-Malaysians to benefit 100%.
We own a percentage of the building company Nobull
I think its nearing the takeover nobody can refuse
"Hopefully something is afoot."
Yes, eps of 80p a share for FY2021, I wonder? We are actually getting some CPO price upside over $1,300 without it being subject to export levy and export tax. And they are not slacking on future production volume growth: they are doing about 10,000 hectares of EXTENSION planting. That's just brilliant. I don't understand the significance of the property transaction - usually there is a mega economic rent to be stripped out when land changes from agricultural to residential use - I am not clear whether we sold the land with planning permission or without it. The one who gets the planning permission gets the economic rent, or the profit from privilege. Is it our 40% own property development company that gets the economic rent or was it us on sale of the land? Maybe we will get a special dividend, if the amount is large.
I expected these to drop back a bit when they ex dividend. Price seems to be holding up well & creeping up. Hopefully something is afoot.