Cedar Woods Properties says a strong second half to the 2015 financial year should produce another record profit result, with the Perth-based developer increasing its full-year profit guidance to $41 million.
Net profit for the six months to December 31 came in at $9.1 million, but the developer’s half-year revenue was down 23.7 per cent on the previous corresponding period, to $77.9 million.
However, a high proportion of its scheduled project completions will occur in the second half of the year, which is expected to drive a sixth consecutive year of profit growth.
Cedar Woods will pay an interim dividend of 12 cents per share.
Managing director Paul Sadleir said that, at December 31, Cedar Woods had secured pre-sales of around $147 million.
Most of those pre-sales are scheduled to settle in the second half of FY2015, while WA projects expected to contribute strongly in the second half of the year include The Rivergums, Mariners Cove, Piara Central, Elements, Byford on the Scarp and the Brook at Byford.
Cedar Woods also has a number of substantial projects at various stages in the planning pipeline, with a local structure plan lodged with the City of Swan in October for a 273-hectare site in Hazlemere, while planning is also advanced at the 480-lot Brabham in the Swan Valley.
The developer is also working on detailed land use and density planning for its Mangles Bay Marina project in Rockingham, a joint venture with LandCorp which was granted federal and state environmental approvals last year.
Mr Sadleir said Cedar Woods was also increasingly active on the acquisition trail.
“Our gearing is towards the lower end of our range so we’ve got plenty of financial headroom in our facilities to allow us to both develop current projects and acquire new ones,” Mr Sadleir told Business News.
“We’ve probably got more focus on Brisbane or Melbourne than we do in Perth, in Perth we’ve got quite a few projects keeping us busy in the design and approvals phase.
“In Melbourne we are further advanced in the approvals and design with our projects there so we’re looking to top up the portfolio.
“With Brisbane, we’ve said for a while now that we’re looking to add to the portfolio so it looks a bit like Perth and Melbourne, where we’ve got younger projects going through the early phase, some mid-life projects that are generating solid cash-flows and then some getting towards completion.
“We look to have that mini pipeline in each state and that’s the reason for the focus in Queensland.”
Meanwhile, Cedar Woods also announced today it had begun the sales process for its Masters Home Improvement store in Williams Landing in Victoria, with settlement targeted for the first half of FY2016.
Mr Sadleir said the sale was in line with the developer's strategy of unlocking value at select Williams Landing town centre sites, to diversify income streams and provide an additional revenue source.
"We’ve got quite a bit going on there; the Masters has been open for around 12 months and we’ve just opened the shopping centre. We’ll probably take that through five or six years of expansion and continued growth but we may well get ot a point where it reaches maturity and we’ll make a decision as to whether we keep it or sell it on," he said.
"For most of the sites in the town centre we’ll seek to add some value and then if the time is right we’ll move them on and recycle the capital into new projects, so it will be a combination of development and sales there."