West Perth-based property developer Cedar Woods Properties Ltd has reported a 67 per cent fall in net profit for the half year to December 31 2007, although the company maintains it is on track to meet a full year net profit of $20 million.
West Perth-based property developer Cedar Woods Properties Ltd has reported a 67 per cent fall in net profit for the half year to December 31 2007, although the company maintains it is on track to meet a full year net profit of $20 million.
The company posted a net profit of $4.6 million for the period, down from the $13.8 million it recorded in 2006.
Revenue also halved, from $63.5 million in the previous corresponding period to $31.6 million.
In its report, the company said it expected stronger earnings in the second half of the year, with a number of projects scheduled for completion and presales due to be finalised.
In particular, the company's apartments project at Halls Head, near Mandurah, and a development at Mandurah Country Club are expected to boost earnings.
Development of several Melbourne projects, including a 600 lot residential estate in the city's northern suburbs, is due to begin in the next few months, although will not contribute to earnings until the 2009 financial year.
Below is a statement from Cedar Woods:
Cedar Woods Properties Limited has reported a net profit of $4.6 m for the half year to 31 December 2007 and has maintained its full year net profit forecast of approximately $20m, which will be a record for the company.
The company expects the second half earnings to be much higher than the first half, as previously advised to the market. The company's development and settlement program will often cause half year results to be uneven.
Management's focus is primarily on the achievement of full year results and the company expects a stronger second half as programmed developments are completed and presales are crystallised. In the previous financial year the second half result was significantly lower than the first, although a record full year profit was achieved.
As a consequence, the directors are pleased to declare a fully franked interim dividend of 8 cents per share, payable on 18 April 2008. The dividend reinvestment plan will be suspended for the forthcoming dividend but is expected to be reinstated when financial markets stabilise and then continue on an ongoing basis.
During the second half the company expects to complete the townhouse development, 'The Fairways' at Mandurah Country Club and the prestigious 'Waterline Apartments' at Halls Head. Settlement of significant presales at these projects and the second stage of Cambridge Waters are also expected.
Earnings from these projects will bolster second half earnings.
Development is expected to commence at the company's Melbourne projects in the second half.
The first stage of Williams Landing is expected to commence late in the second half with the first earnings from the project delivered in FY2009. Many of the state's most prestigious builders have confirmed their participation in a new 50 home display village.
Recently the company announced that together with the St Ives group, it had been selected by the WA State Government as the preferred consortium for the redevelopment of the former Carine TAFE campus. In conjunction with Landcorp, the State government's land development arm, the consortium will develop a range of dwellings and facilities to meet the needs of the community.
During the first half the company's financiers extended the $76m corporate finance facility to a 3 year evergreen facility. This provides the company with credit support until at least 30 September 2010.
With a diverse portfolio of projects and a strong balance sheet the company is well positioned to continue to deliver earnings growth and shareholder value.
