Rowsley reports Net Loss of $5 million before goodwill write-down
for RSP Acquisition
RSP meets full year profit target of $25 million
Rowsley’s Balance Sheet remains debt-free
Singapore, 21 February 2014 – Rowsley Ltd. today announced a net loss of $5
million for the nine months ended 31 December 2013, before the goodwill write-down
for the purchase of RSP Architects Planners & Engineers. Rowsley said RSP met its
profit target of $25 million for 2013.
Rowsley, which has transformed itself from an investment holding company into
an integrated multi-discipline real estate business, had acquired RSP in September
2013 for $187.5 million by issuing 1,250,000,000 shares at $0.15 each. The
purchase consideration was remeasured at closing date in accordance with financial
reporting standards to $422.5 million at $0.65 cents or $0.338 per share after
adjusting for the warrants issued. As a result, $221 million of goodwill had to be
written down. This is a non-cash accounting adjustment that does not affect the
company’s cash flows or the fundamentals of its business.
RSP, Singapore’s leading architectural firm, was one of two substantial
acquisitions completed last year; the other being a 9.23-hectare piece of land in
Johor Bahru’s Iskandar region to build an integrated wellness and lifestyle
development called Vantage Bay.
Rowsley said that its nine months’ results reflected the consolidation of RSP’s
4th quarter financials after it became a subsidiary. RSP, it added, has achieved profitafter-
tax of $25 million for the full year of 2013 and is on track to meet the targets set
by Rowsley under the terms of the acquisition.
On its Iskandar Region project, Rowsley said that although the Malaysian
government had recently introduced anti-speculative measures for properties, it was
confident that the Johor State Government and Iskandar Regional Development
Authority remained committed to the long-term economic development of the
Iskandar Region. The Johor State Government is in the process of clarifying how
and to what extent the measures will be implemented. Once clarified, Rowsley
expects the strong demand for properties in the Iskandar Region to once again drive
the interest in the Johor property market.
Chiang Chie Foo, Chairman of Rowsley, said: “We have created tremendous
value for shareholders with our two acquisitions and are confident that the demand
for our product in Iskandar will be strong. Being debt-free, we are unfazed by any
anti-speculative measures in the operating environment and are poised for further
Lock Wai Han, Rowsley’s Group CEO, added: “Our two acquisitions in 2013
were successfully carried out and we are already seeing the benefits of the synergy.
RSP’s expertise in architecture, urban-planning and engineering will maximise the
potential of the prime land which Vantage Bay sits on.
“We are optimistic that our development project in Vantage Bay will attract
genuine owners and investors.”
Rowsley remains debt-free and continues to look for further investment
opportunities in the region.