Thursday, December 5, 2019
Question: You are required to provide a brief historical background of Deyaar Development PJSC in terms of performance, benchmarking against industry, and major changes in the past or foreseeable future. Answer: Preface: Deyaar Development is a renowned name and a recognized brand face of the real estate industry. It is a public limited company listed on DFM (Dubai Financial Market). It is headquartered in Dubai (UAE). Deyaar got listed on DFM in September 2007. The prime focus of the company is full-fledged real estate activities and if the criteria of going global is considered, it have more than 36 subsidiaries across the world running successfully. Deyaar was established in 2002 and on origination, it was property management unit of DIB (Dubai Islamic Bank). Later, it got established as independent real estate company and their business marked organized structure to develop real estate properties. As today, the infrastructural development of Dubai is considered extra-ordinary in the world and beyond the shadow of doubt, credit counts for giant firms like Deyaar.(EMIS) In the words of CEO Saeed Al Qatami, Deyaar always keep the track of the time and continuously refresh the core services of the co mpany. The purpose behind doing this is to let customers stay happy and satisfied with their relation to Deyaar. The journey of becoming the trust-worthy and customer focused real estate developer have not been very smooth. It took a while for Deyaar to bring success, name and fame in real estate sector. (Deyaar) Strategy: It is always a milestone for any business to become one stop solution provider for customers in their expert area. Deyaar have strategized its policies to provide customers with supremacy of services and vision to create natural living habitat. The scope of services never ends with handling over the property because customers are always preferred and their needs are met with Deyaar facilities management services. Currently, Deyaar is service provider for facilities management for over 18000 plus residential and commercial spaces. In a nutshell, success key of the Deyaar business are the happy customers. CEO emphasis on the success criteria by saying that successful projects not only mark the expansion of business but also shape entities that are serving as sustainable sources of revenue. (Deyaar) Key strategies: Adaptability to the fast moving global business environment helps Deyaar stay ahead in the race. Good deals to customers keeping their financial stability in context and this adds valued customer to the business pipeline. Unrivalled service quality Prioritizing social responsibility over profits have raised the performance bars for Deyaar. Market intelligence and world-class services are the backbone to enjoy edge over competitors.(Deyaar) In financial language, there are certain set of ratios applied to understand the financial performance of any firm. For Deyaar, following ratios are taken from the end of first quarter for the year 2016: P/E Ratio: Definition: It refers to the ratio of the companys stock price to the companys earnings per share. High P/E ratio could be achieved through: -Innovation in business activities. -Profits of the business. -Quality of the management. -Good return on capital invested(money control) Deyaar status on P/E ratio: Deyaar with P/E ratio of 68.39 and perhaps best in real estate industry and with rising stock price have positive impacts on earning of the company. (English Mubasher) Return on Equity: Definition: ROE is a profitability ratio. It measures the ability of a firm to generate profits from its shareholders investments in the company. (My accounting course) ROE can never be interpreted to be on the basis of high or low because lot more depends on the debt-equity mix. Deyaar status on ROE: From the financials of Deyaar, it is observed that equity is higher is the debt-equity mix. It concludes that investment from shareholders is utilized in the best potential. Deyaar have good ROE of 4.33 in the first quarter end of 2016 and thus, is positive in terms of growth and expansion of the business. (English Mubasher) Return on Assets: Definition: ROA is very simple in terms of understandings because it is effective indicator on how efficient is firm in utilizing its assets. (Accounting explained) Deyaar status on ROA: With ROA of 3.29, it is observed that Deyaar did not throw the funds in one area to earn profits but rather went for resourceful allocation to excel with large profits and less funds. (English Mubasher)Financial Figures: Deyaars financial report net profit for the year 2015 amounted to AED 291 million rising from AED 282 million of the year 2014. Alterations, modifications and predictions: Transfer from properties held for sales to investment properties- This move by Deyaar Development is being utilized in setting up hotel chains and other investment options. This resulted in generating long term revenues either by leasing or from rent. (Deyaar) Partnership with Ascioglu- Deyaar Development entered into strategic partnership in May 2016 with Ascioglu, a leading Turkish real estate brand. Deyaar with this partnership aims to offer optimal value to customers and strong returns on their investment. (Deyaar) Technical move to customer e-service portals- Deyaar development took this initiate to automate the process of feedback, complaints or service requests. E-portal is user friendly and also offers quick response. (Deyaar). Reference: ae,(n,d) CEO Message, viewed on June 13,2016 Myaccounting course,(n.d),Return on equity ratio, Accounting explained,(n.d).