LPN announces 2021-2024 will see sustainable growth of its revenue and net profit through efficient management of costs and quality development of affordable residential projects and services to meet demand of all customers.

Mr Opas Sripayak, chief executive officer and managing director of L.P.N. Development Plc, the leading property developer of both horizontal and vertical residential projects under the Better Balance concept, has announced the company’s 3-year business strategy for sustainable growth from 2021-2024. The 3-year strategy will drive sustainable growth in terms of revenue and net profit via efficient management of costs as well as research and development based on customers’ insights and Big Data from the company’s surveys and analyses.

“Our business strategy is to develop both horizontal and vertical residential projects based on functionality and emotional benefits that match all of our customers’ lifestyles, at affordable prices under our business concept, the Better Balance,” Mr Opas said.

To achieve this business goal, the company has reorganised its Functional Organisation into Business Units, while also redesigning business processes by using digital technology to create business platform to collaborate with and to enable others business entities including small and medium enterprises to join our business service platform. This improves the working process by making it more flexible in decision-making while boosting efficiency in managing expenses and operating costs. This also enhances customers’ experience, he said.

“The year 2021 is a ploughing and preparing period for our business to leap in 2022-2024, with the goal of generating total revenue of 16 billion baht in 2024, to match the figure we achieved in 2015.

“We are confident of achieving this goal. We were able to overcome risks in 2020 by maintaining our ability to generate revenue and net profit even in such time we faced the COVID-19 outbreak that forced almost all business sectors to abrupt halt, including the property sector,” he said.  

This year the firm is empowering the drive for revenue growth and managing costs by focusing on four business strategies, namely developing horizontal residential businesses, expanding recurring income from the service business, managing financial liquidity, and creating added value and income from its existing assets, Mr Opas added.

– Expanded investment in Horizontal Residential Projects  

This year the company plans to open six new horizontal residential projects worth 5.5 billion baht. Two of the six projects will be premium housing projects, priced at over 10 million baht per unit, under 3-billion-baht Baan 365 development. “Baan 365” projects will locate in the central business districts on small plots to create private resident units to match the homebuyers’ demand and preferences in this market segment.

The other four will be semi-detached houses and townhouses priced lower than 10 million per unit under Lumpini Town Place and Lumpini Town Ville developments worth about 2.5 billion baht. Product highlight for this market segment is a new wider-townhouse design to serve the current homebuyers’ demand in need of three parking space per unit.

The company has targeted revenue growth from its horizontal residential projects from 20 per cent of total revenue in 2020 to 30 per cent in 2021, with 50 per cent of total revenue targeted from sale residential projects in the year 2024.

Meanwhile, L.P.N. Development will maintain revenue from vertical residential projects or condominiums at close to the 2020 figure by opening 2-3 projects worth 3 billion baht in 2021, the first of which will be launched in the second quarter of this year.

Increase recurring income  

The company will expand its service business performance from its subsidiaries including Lumpini Property Management Co Ltd, LPC Social Enterprise Co Ltd, LPN Wisdom and Solution Co Ltd, and LSS Solution Co Ltd, to drive long-term business growth by focusing on services in residential projects developed both by L.P.N. and other property firms. The company also creates its digital business platform to collaborate with others business including small and medium enterprises and start up to expand its service income.

Financial liquidity management  

The company has delayed plans to acquire new land for condominium projects this year as it already has eight plots to develop condominium projects in 2021 under its existing business plan. The company also has sufficient condominium projects to-and-under construction and transference to generate income until 2024. This will help generate enough financial liquidity for investment in other areas while also providing sufficient financial reserves against business risks in the event of a fresh outbreak of COVID-19 in the country.

However, L.P.N. has continued to acquire land to develop horizontal residential projects by setting aside an investment budget of 4 billion baht this year. This budget will come from the company’s existing cash reserves plus a debenture issue worth 3 billion baht, 2 billion baht of which will expire this year.

After the debenture issue, the company has continued to maintain its interest-bearing debt-to-equity ratio of no more than 1:1, he said.

Create added value and income from existing assets  

This year, the company plans to create added value that generates income from existing assets, including recurring income by launching its ready-to-move condominium projects to tenants. It is also looking into income-generating opportunities from its undeveloped projects, new products and services. The company has targeted 30 per cent growth in recurring income this year compared with 2020.

Mr Opas said the company’s strategy calls for residential business to account for about 70 per cent of total revenue targeted this year, maintaining growth from 2020, with the other 30 per cent coming from recurring income in the both service and rental business. For the residential business, the company is targeting 70 per cent of revenue from condominium projects and 30 per cent from horizontal residential projects.

The company is targeting presales of 10 billion baht in 2021, close to last year’s presales, as the company’s total revenue in 2021 will be nearly as last year figure, which reports total revenue 7.36 billion baht and net profit 734.94 million baht, while the total backlog of units ready for sale and transfer to customers is worth 2.2 billion baht and will account for 11 billion baht in the company’s 2021 inventory.

“We are confident that after weathering the COVID-19 outbreak in 2020, experiences we have gained and lessens we have learned from many crises over the past 32 years give us the strength and readiness to grow sustainably according to our goals,” Mr Opas said.