BANGKOK - Land & Houses PCL LH.BK, Thailand's biggest home builder, said on Tuesday it expected to report only single-digit growth in net profit in 2010 due to higher costs as government tax breaks expire in March.

It maintained a revenue growth target for the year of at least 15 percent because it is boosting new housing projects to tap rising demand in the middle-class market as the economy improves, company executives told reporters.

Without the tax breaks, the company will shoulder an additional cost of about 4 percent of sales ... Our bottom line will show single-digit growth this year instead of dougle-digit, said Senior Executive Vice-President Adisorn Thananun-narapool.

It planned to raise house prices after March as it passed on higher costs, and expected an average gross margin in the region of 31.3 percent, slightly better than last year, executives said.

Revenue from house sales would rise 13.5 percent to 19.6 billion baht ($597 million) this year, with sales in the first quarter higher than last year's as home buyers rush to purchase before the tax breaks end, they said.

Last week, the developer posted a better-than-expected 14 percent rise in 2009 net profit to 3.9 billion baht, boosted by higher sales of detached houses and city centre condominiums [ID:nBAK003000]

Land & Houses, 12.41 percent owned by the Government of Singapore Investment Corp [GIC.UL], taps the high-end and middle-class market. It builds detached houses, town houses and condominiums at an average price of over 5.0 million baht.

According to StarMine SmartEstimates, which predicts earnings by putting more weight on recent forecasts of top-rated analysts, the developer is likely to post a 4 percent increase in 2010 net profit to 4.07 billion baht on revenue of 19.8 billion baht.

Land & Houses planned to spend 6 billion baht on land purchases this year and to sell 17 new housing projects valued at over 30 billion baht, mostly in the capital, Bangkok, executives said.

It would spend another 1.5 billion baht on investment, of which 1.1 billion would go towards a planned capital increase by unlisted subsidiary LH Bank and the rest for its LH Property joint venture.

The developer would sell a combined 3 billion baht in bonds in the first quarter of this year, with a three-year, 2 billion baht bond offering a coupon of 3.0 percent and a 3.6-year, 1 billion baht bond paying 3.4 percent, they said.

At the midsession break, LH shares were up 1.7 percent at 6.05 baht while the main Thai stock index .SETI was 0.94 percent higher. ($1 = 32.82 Baht) (Writing by Viparat Jantraprap; Editing by Alan Raybould)