The listed property developer Sansiri Plc (SIRI) aims to improve its figures with a big campaign to generate cash flow and reduce debt after completing a merger with the property development business unit of its subsidiary Plus Property late last year.

"When it's time to tighten our belt, we need to do so," said senior executive vice-president Wanchak Buranasiri.

According to Mr Wanchak, the merger will save Sansiri around 40-50 million baht a year and also provide more flexibility in its work.

He said aiming for growth could be the wrong strategy unless the timing is right.

Sansiri decided to scrap a listing plan for Plus Property a few years ago and initiated the merger between the parent and its subsidiary's property development unit to save costs.

Under one roof, the company can operate across several brands and pricing segments, as does top-ranked Land & Houses, said Mr Wanchak.

Plus Property used to be a major subsidiary, developing townhouses and condominiums under Town+, My Condo and Condo One brands.

Mr Wanchak said townhouse development projects under Town+ brand would now be under Sansiri, while Plus condominium development projects under Condo One and My Condo would be replaced by new Sansiri brands.

Under the completed business restructuring plan, Plus will only handle property consulting and brokerage services, as it used to four years ago.

According to Mr Wanchak, Sansiri currently has a debt-to-equity ratio of 1.8 times, cash flow of around 1.5 billion baht and debt of 9.5 billion. Its gross profit margin is around 29-30% but net profit is in a single digit due to higher expense.

In a bid to stimulate sales amid the country's current slowdown, the company plans to hold its own fair, Living in Style 2009, at Siam Paragon from March 6-8, where it will introduce 43 condominium, single house and townhouse projects worth a total of 25 billion baht. About 40% of the projects are completed single houses and condominium units.

Mr Wanchak added that the fair would launch eight townhouse projects, which were postponed from late last year, and two condominiums with new brands: 77 on Soi Sukhumvit 77 and The Vertical Aree on Soi Aree.

The company is also joining with Siam Commercial Bank to offer mortgage loans of up to 100% of selling prices, zero interest for one year and a discount of 3.3% to customers, the amount it will get from the government as a return on special business tax.

Samatcha Promsiri, senior marketing manager, said the company expected to generate 2.5 billion baht in sales from the event.

Sales in the first quarter of the year are therefore expected to top 5.5 billion baht, he said. The company had recorded sales of 2.8 billion baht by Feb 22.

Last year, Sansiri recorded sales of around 15-16 billion baht, 20% below a target of 20 billion baht due to a property market slowdown in line with weak economic sentiment.

The company targets 17 billion baht in sales by the end of 2009.

SIRI shares closed yesterday on the Stock Exchange of Thailand at 1.99 baht, down seven satang, in trade worth 3.4 million baht.

source : www.bangkokpost.com