Cedar Woods Properties is targeting a stronger second half of FY2020 after recording an expected profit dip in the first six months of the financial year, while Stockland said its results were also in line with expectations, with its earnings also weighted towards the second half.
Perth-headquartered Cedar Woods recorded a net profit of $10.2 million, down 67 per cent on the previous corresponding half year, while its revenue was down 37 per cent to $128.8 million.
Managing director Nathan Blackburne said the result was in line with previous profit guidance, with the company’s development pipeline likely to produce a much stronger second half.
“The completion of significant development stages during this period underpins a significantly stronger second half, when we will see three new projects deliver revenue for the first time,” he said.
Cedar Woods said its presales at the end of December were $340 million, with around half expected to settle in the second half of FY2020.
A research note from Morgans indicated Cedar Woods’ pipeline would support dividend growth, supported by the company’s strong balance sheet and consistent earnings profile.
“We remain positive on Cedar Woods’ medium-term prospects and earnings delivery through the cycle,” the research note said.
“Key longer-term risks primarily reflect the potential for lower earnings in a weaker residential cycle.”
Meanwhile, Stockland recorded a 68 per cent lift in statutory profit to $504 million, with its funds from operations of $384 million down 5.6 per cent on the previous corresponding half year.
Managing director Mark Steinert said the statutory profit lift was primarily on the back of $199 million in positive revaluations of the company’s portfolio.
Stockland’s commercial property operations, comprising logistics, office properties and retail centres, recorded revenue of $308 million, while its residential communities division recorded $134 million in revenue.
Both measures were down from the previous corresponding half year, at 1.7 per cent and 6 per cent, respectively.
“We’ve continued to make good progress on the re-weighting of our portfolio to balance our exposure to communities, workplace and logistics, and retail, which will deliver resilient and sustainable securityholder returns,” Mr Steinert said.
“We expect that this portfolio rebalancing will be achieved over the next five years.”
