Sansiri's board of directors has approved an increase in registered capital from Bt11.61 billion to Bt19.82 billion as it seeks to boost its profit margin and achieve double-digit annual revenue growth, company president Srettha Thavisin said.
“Increasing our registered capital is part of our re-engineering of our business structure, what we call ‘engineering for growth’, by focusing on three categories: cost management, market strategy, and administrative costs. This will drive long-term, sustainable growth of our business,” he said.
He added that the company had put off increasing its registered capital since 2009, by saw the need to do so now to support its business growth for the long haul.
After the increase, Sansiri’s gearing ratio will drop from 2.1:1 to 1.5:1 by the end of this year and is targeted at 0.8:1 by 2017.
Chief operating officer Wanchak Buranasiri said the increase in registered capital would have little dilution effect on existing shareholders.
To increase registered capital by Bt8.2 billion, the company will issue 3,614,411,911 new shares for its existing shareholders, for whom three existing shares will be worth one new share priced at Bt1.07. Existing shareholders who buy the new shares will get one warrant for every three existing shares.
The board of directors will propose the capital increase at the shareholders meeting on September 12.
Srettha said that after Sansiri’s financial restructuring is complete by the end of the year, it would also restructure its cost management by improving its construction system. It will also revise its marketing strategy to focus on its house brand and adjust its advertising strategy. These measures should boost its net profit margin and annual business growth to double digits between now and 2017.
It will develop residential projects throughout the country, but 80 per cent of its revenue will be from metropolitan Bangkok. Up to 40 per cent of its revenue will be from detached houses, 45 per cent from condominiums, and the rest from townhouses.
In terms of customer base, 30 per cent of its revenue will come from the premium market – units costing more than Bt20 million – 35 per cent from the medium market, and the rest from the lower-priced market.
Sansiri is confident of hitting its revenue target of Bt34 billion this year, Srettha said.
In the first quarter, the company recorded revenue of Bt5.5 billion and net profit of Bt829.98 million.