Is PropNex about to report $1 bil in revenue for FY2021?

/ EdgeProp Singapore |
Ismail Gafoore, CEO and executive chairman of PropNex (centre), flanked by his management team (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Join our  Telegram  channel and follow our  Facebook  for the latest update.
SINGAPORE (EDGEPROP) - This evening, the board of directors of PropNex responded to queries from the Singapore Exchange Securities Trading Ltd (SGX) on Feb 17. The queries arose following feedback from an attendee at a private event on Jan 9 during which the company executive chairman and CEO, Ismail Gafoore, is said to have disclosed to the company’s agents that the group’s full year commission for 2021 is more than $1 billion. Hence, one could deduce that the group’s full-year revenue would exceed $1 billion.
The submitter is said to have provided relevant screenshots of the postings by the company’s executive officer and property agents on social media that the company has crossed the $1 billion mark in revenue for 2021. Based on a search by EdgeProp, those postings have since been removed.
In response to the SGX queries, PropNex said that the company had conducted a jumpstart event on Jan 10, 2022 to update its salespersons on the development in 2021. “In that event, our CEO highlighted that the volume of property transactions for 2021 exceeded 86,000,” the company comments. “He had indicated that the commission relating to those property transactions carried out by its salespersons exceeded $1 billion, which was factual.”
However, there is a difference in the commission related to the property transactions and the recognition of those commissions as revenue, the company points out. “As not all transactions were completed at the end of the financial period, he had not said that the Group’s full year revenue for 2021 was more than $1 billion,” according to PropNex.
The amount of commission that a salesperson may earn can be estimated at the date when the transaction was carried out, i.e., at the signing of the Option-To-Purchase (OTP). However, commission is only earned and recognised as revenue when the transaction is completed, upon execution of the Sale & Purchase (S&P) agreement. On the other hand, should the transaction be aborted, no revenue will be recognised, PropNex explains.
The buyer is usually given time to execute the S&P agreement, adds PropNex. “As such, the date when a transaction is carried out differs from the date when that transaction is completed.” What’s more, completion of a transaction may be further delayed due to reasons such as the buyer needing more time to dispose of his/her existing property, to arrange a bank loan, or to review the S&P agreement.
“Consequently, the amount of commission when transactions are carried out within a financial period is different from the amount of revenue recognised for that period,” says PropNex. “These terms relative to the completion of transactions have been used consistently in the announcement of results for each quarter.”
The company further stated that it had not made selective disclosure of material information to its salespersons.
Based on its latest released financial results for 3Q2021 released on Nov 10, 2021, revenue for the first nine months ended Sept 30, 2021, doubled to $715.5 million from $358.4 million a year ago. Net profit after tax for the first nine months of 2021 grew 114.8% to $49.9 million, from $23.2 million in the previous year. This was said to be mainly driven by the increase in commission income from agency services and project marketing services.
The full year revenue would be disclosed in the announcement of the full year results, which is expected to be released on Feb 24.

Follow Us
Follow our channels to receive property news updates 24/7 round the clock.
EdgeProp Telegram
EdgeProp Facebook
Subscribe to our newsletter

Our Site (previously known as The Edge Property Singapore) is the best property portal for real estate agents, investors, home-seekers and sellers alike in Singapore. On EdgeProp, you will be able to find the latest and hottest property news, property listings, and access tools for your research and analysis.

Whether you are looking to buy, sell or rent apartments, condominiums, executive condos, HDBs, landed houses, commercial properties or industrial properties, we bring you Singapore’s most comprehensive and up-to-date property news and thousands of listings to facilitate your property decisions.

View More