Matrix

: It's Unbelievable...

Matrix FY13Q4 Financial Result

MATRIX (RM mil)	FY13Q4	FY13Q3	FY13Q2	FY13Q1
Revenue	144.3	127.4	147.3	155.6
PBT	56.4	48.7	40.6	61.5
PBT%	39.1	38.2	27.6	39.5
PAT	40.7	36.2	30.0	46.0
Res & Com Prop %	74.1	66.7	76.0	76.0
Industrial Prop %	20.8	27.8	21.0	24.0
Industrial Land %	5.1	5.5	3.0	0.0
Total Equity	552.4	540.1	518.3	387.9
Total Assets	900.5	862.8	793.0	645.4
Trade Receivables	140.8	161.5	118.1	185.7
Prop dev cost	443.8	362.4	400.0	360.5
Inventories	1.6	1.4	2.6	3.0
Cash -OD	83.8	211.2	206.5	38.5
Total Liabilities	348.1	322.7	274.7	257.5
Trade Payables	245.7	229.5	198.3	204.8
ST Borrowings	35.5	36.7	8.8	17.0
LT Borrowings	15.3	15.5	16.1	16.9
Net Cash Flow	53.4	180.8	176.1	8.1
Operation	39.7	120.7	65.2	9.5
Investment	-69.2	-37.7	-17.0	-0.4
Financing	82.9	97.8	127.9	-1.1
EPS	13.50	12.10	13.10	63.70
NAS	1.83	1.80	1.73	1.63
D/E Ratio	Net Cash	Net Cash	Net cash	Net Cash

For FY13Q4, Matrix's revenue and net profit are 13.3% and 12.4% higher QoQ respectively. Its PBT margin is kept at 39%.

The whole FY13 net profit of RM152.9mil (47.7% growth YoY) is slightly better than RM145mil that I predicted.

While it is certainly a great result for Matrix, it is widely expected and is not an unbelievable one. The one that is "unbelievable" is its chairman.

Where is the "double growth" ???

Matrix's cumulative operational cash flow drops substantially from RM120.7mil at the end of Sep13 to RM39.7mil at the end of Dec13, due to massive increase in the value of its development properties (+RM81.6mil) and development properties in progress (+RM70mil). These 2 items have reduced Matrix's operational cash flow by RM151.6mil.

I think this may be due to the timing of progress billings and banks have not release money to Matrix? So it should have no problem to be realized into cash later & should not affect Matrix's cash flow too much in the future.

Also, cash spent in buying land has increased from RM35mil 3 months ago to RM66.3mil.

Because of the reasons above, cash (minus bank overdraft) falls from RM211.2mil to RM83.8mil.

Nevertheless, Matrix is still a net cash company with RM50.8mil borrowings.

Personally I'm not too worried about this situation.

MATRIX (RM mil)	FY13	FY12	FY11	FY10	FY09
Revenue	574.7	456.1	624.3	195.6	204.0
Revenue growth %	26.0	-26.9	219.2	-4.1
PBT	207.2	142.8	106.3	30.0	24.4
PBT%	45.1	31.3	17.0	15.3	12.0
PAT	152.9	103.5	80.0	22.0	19.1
PAT growth %	47.7	29.3	263.6	15.2
EPS	64.7	43.6	29.2	8.6	7.8
NTA	1.83
ROE	27.7

Overall, FY2013 is a good year for Matrix in which revenue grows 26% and net profit grow 47.7%. The PBT margin of 45.1% is quite unbelievable for a property company.

Its ROE of 27.7 is also great!

At the same time, Matrix announced a fourth interim single tier dividend of 5sen per share, bringing the total regular dividend to net 25.375sen plus a special dividend of 5sen. This represents a payout ratio of 60% of net profit in FY13, exceeding its policy of 40%.

Dividend yield is still at a high of 8% even at current share price of RM3.80.

After the result announcement, Matrix's share price took a set back despite a decent result, perhaps due to lack of surprise and generally weak market yesterday. It has missed a good chance to break its historical high and might need to wait for another chance.

Looking forward, Matrix plans to launch new projects worth RM660mil in FY14, after successfully sold a record RM788mil worth of properties in FY13 (RM686mil in FY12). Its unbilled sales stands at RM437mil at the end of Dec13.

With the full FY13 PAT of RM152.9 and total paid up shares of 301.7mil, Matrix's FY13 EPS is 51sen. So I'll revise my own target price to RM5.10 (from RM4.93).

In the end, no double growth in net profit, no special dividend and no bonus issue... but I'll still hold it.