Weak property market hits Cedar Woods

The sluggish property market has impacted Cedar Woods Properties which reported a net loss of $5.6 million for the first half of the 2009 financial year, down from the prior corresponding period's net profit of $4.6 million.

The announcement is below:

Cedar Woods Properties Limited (ASX:CWP) today released its report for the first half of FY2009.
In line with the guidance provided on 13 January 2009, Cedar Woods reported a net loss of $5.6m in
the first half of FY2009, reflecting the weak demand in the property market.
However, the company remains confident that $85m in presales already in place will provide a
significant second half profit and forecasts a full year net profit in the range of $7m-$9m.
Cedar Woods' Managing Director Paul Sadleir said that as in the last financial year, the majority of
settlements and hence income will be earned in the second half of the year.
"During the first half of the financial year, we commenced construction at two of our new Melbourne
residential projects and have now contracted more than 370 presales with delivery of approximately
two-thirds of these titles expected in the second half of the year. Construction of the initial stages is
now well progressed and nearing completion."
"We have experienced a significant increase in residential sales in the first home buyer sector over the
summer as a direct result of the stimuli provided by the Federal Government and Reserve Bank.
However, the effect of this has yet to flow through to the broader market so we shall continue to
monitor conditions and provide further earnings guidance after the end of the third quarter."
Cedar Woods continues to enjoy strong support from its bankers. The company has a $114m
corporate facility in place until September 2011 and since November 2008 has put in place new
finance facilities with National Australia Bank as it seeks to widen its funding base. These facilities
provide ample funding for the company's development activities for the next 3 years.
In light of the first half loss, the Board has decided to suspend the interim dividend, however in
anticipation of the full year profit the Board intends to maintain the current policy of distributing
approximately 50% of full year net profit, which will be paid as a final dividend.
The company is well placed to participate in an upswing in the market, with an excellent product range
and projects located in key growth areas.
Cedar Woods half year report summary
- First half net loss of $5.6m, forecasting a full year net profit range of $7m-$9m
- $85m in presales at projects completing in the second half
- $114m bank facility in place until September 2011
- Interim dividend suspended, full year payout ratio to remain at 50% of FY2009 net profit.