Cedar Woods profit up 86%

Property developer Cedar Woods has recorded a $17.2 million net profit after tax for the 2010 financial year, up 86 per cent on the previous year.

The company has recorded earnings per share of 29 cents, compared to 16.2 cents reported in the previous year, up 79 per cent.

Cedar Woods will pay a fully franked dividend of 8 cents per share in October.

The company's debt position improved also significantly with gearing (net bank debt-equity) dropping to 36 per cent at June 30, comfortably within the company's 20-75 per cent target range.

Managing director Paul Sadleir said that the result confirmed that the company had performed strongly during a period when the property market in Australia was recovering from the global financial crisis.

"This result confirms that our business strategy remains appropriate during difficult economic conditions," Mr. Sadleir said.

"We are well positioned, with an excellent product range across two states and strong pre-sales in place for FY2011."

The company is forecasting a full year net profit for FY2011 of $22 million, the majority of which will be recorded in the first half.

See full company statement below:

Cedar Woods Properties Limited today announced a net profit of $17.2 million for the year to 30 June 2010, up 86%.

The company has recorded earnings per share of 29.0 cents, compared to 16.2 cents reported in the previous year, up 79%.

A fully franked final dividend of 8 cents per share will be paid on 29 October 2010 and the dividend reinvestment plan will be in operation for the final dividend.

Managing Director Paul Sadleir said that the result confirmed that the company had performed strongly during a period when the property market in Australia was recovering from the global financial crisis.

"This result confirms that our business strategy remains appropriate during difficult economic conditions. We are well positioned, with an excellent product range across two
states and strong pre-sales in place for FY2011," Mr. Sadleir said.

"We also have a strong balance sheet, ample funding and we are anticipating contributions from new projects going into FY2011."

The company's well located residential estates, in the northern and southern coastal corridors of the Perth metropolitan area, continued to deliver during FY2010.

The property market in Victoria also performed well during the year and a growing contribution from the company's Melbourne projects helped to drive the stronger full year result.

The strong trading results have resulted in a substantial improvement in asset values during the year.

The company recently announced a new 3 year, $110m corporate finance facility with ANZ Bank.

The company's debt position significantly improved in the second half, with gearing (net bank debt / equity) dropping to 36% at 30 June, comfortably within the company's 20-75% target range. Net bank debt at 30 June was $39.7m, less than half of the company's total available facilities, thereby leaving ample capacity for funding the company's activities.

Outlook
In contrast to FY2010, the timing of settlements of significant projects is anticipated to be
weighted largely to the first half in FY2011. The second half will see continued development although associated settlements will occur in FY2012.

Presales of over $100m are in place across the portfolio, programmed for settlement in
FY2011, providing a platform for the company to achieve strong earnings growth in FY2011.

The company is forecasting a full year net profit for FY2011 of $22m, the majority of which will be recorded in the first half.

The company has a very strong portfolio, with current asset values substantially above both book value and that reflected in the current share price.

With a new 3 year finance facility in place and low gearing the company has ample funding in place to implement its ongoing business strategy.