West Perth-based developer Cedar Woods Properties Ltd has beaten its earnings forecast, today posting a net profit of $21 million for the 2008 financial year, an increase of 11 per cent from the previous year.
West Perth-based developer Cedar Woods Properties Ltd has beaten its earnings forecast, today posting a net profit of $21 million for the 2008 financial year, an increase of 11 per cent from the previous year.
The company had previously forecast a full year net profit of $20 million.
Managing director Paul Sadleir said that in addition to the highly creditable result achieved for the year, the company was excited about the market’s response to the launch of its Melbourne projects.
“The company has performed well during difficult conditions and is strongly positioned with an excellent product range,” Mr. Sadleir said.
“We are pleased with the progress at our Melbourne projects, development is under way and we anticipate receiving significant income from these projects in FY2009.”
“While we recognise a number of factors have increased buyer uncertainty, the prospect for future revenue growth from both Western Australia and Victoria remains strong.”
Sales from the company’s well located residential estates in the northern and southern coastal corridors were augmented by settlements from the company’s built form projects in Rockingham and Mandurah. During the second half, the company launched two major new projects in Melbourne and it has experienced strong buyer demand and achieved significant presales.
The company increased earnings per share by 10 per cent to 37.3 cents, compared to 33.9 cents reported in the previous year.
A fully franked final dividend of 10 cents per share will be paid on 31 October 2008, giving a total full year dividend of 18 cents and the dividend reinvestment plan will be in operation for the final dividend.
During the year the company’s principal financier extended the $98m corporate finance facility to a 3 year evergreen facility. This provides the company with funding until at least 30 September 2010.
In addition, a recently approved separate facility has provided the company funding for the development of the first two stages at Williams Landing.
Meanwhile, new projects will be delivered in WA in FY2009 as the company launches the long awaited expansion of its Helena Valley project in the eastern corridor and the first stage of its syndicated project at Wellard.
After completing the original 400-lot project at Helena valley in 1997, the company will soon commence a 78 lot expansion of the estate on land adjacent to the original subdivision and demand is expected to be strong.
In addition, Cedar Woods’ first land syndicate - in Wellard, a new town only 30 minutes by train and car from the Perth CBD - will commence development during FY2009.
Wellard is conveniently located near two stations on the new Perth to Mandurah railway line, near Kwinana in Perth’s growing southwest corridor. Kwinana and Wellard will provide bus stations, shops and community and medical facilities.
In Victoria, the company’s new project at Williams Landing has seen strong buyer demand with 200 lots now presold to the public and to builders for the builders’ display village.
The first settlements at Williams Landing are anticipated in the third quarter of FY2009.
Construction on the project is underway and it will deliver revenues and profits to the company over a 15 year period.
Also in Melbourne, the company recently launched a 600 lot residential estate known as ‘Carlingford’ at Lalor in the city’s northern suburbs. A new marketing centre has opened on site and 100 lots have been pre-sold from the initial three stages. Construction will commence shortly and the first lots are expected to settle in the later part of FY2009.
As a result of the above pre-sales at Williams Landing and Carlingford, 80 per cent of the company’s FY2009 sales target for its Melbourne projects is represented by unconditional presales awaiting settlement.
The company’s Footscray development, ‘Banbury Village’, will be launched later in FY2009. Just six kilometres from the Melbourne CBD, this project will become a 250 dwelling development, to include a range of townhouses, apartments and terrace housing.
Looking forward, the company is well positioned for FY2009, with a diverse product range, however adverse market conditions in WA may make it difficult for the company to repeat the financial result achieved in FY2008.
Beyond FY2009 the company is well placed to achieve earnings growth from its WA and Victorian operations.
The company will defer providing specific earnings guidance for FY2009 until a clearer picture emerges of the company’s prospects during the year. As was the case in FY2008, due to the timing of settlements of significant projects, earnings in FY2009 are expected to be significantly weighted towards the second half.
