This article is from the Australian Property Journal archive
The strong economic conditions in Western Australia have underpinned yet another record profit half-year for Cedar Woods.
Yesterday, Cedar Woods posted a net profit of $13.8 m for the half year to December 31 2006 – an increase of 39% when compared to the previous year.
For the six months period, the company’s revenue was $63.7 million compared to $52.7 million in 2005.
Cedar Woods’ managing director Paul Sadleir said the strong first half is attributable to the large number of settlements which occurred during the period.
Sadleir also attributed the company’s record result to continuing strong sales at residential projects at Mariners Cove, Mandurah, The Rivergums at Baldivis and The Kestrels in Wanneroo, combined with the profit arising from the sales of the beach front Nautilus Apartments in Rockingham, the majority of which settled in December 2006.
“Management’s focus is primarily on the achievement of full year results, with second half earnings expected to be lower, as a lower number of settlements are programmed in the second half,” he added.
The company has declared a fully franked interim dividend of 7 cents per share for the period. The company has delivered earnings per share of 25.3 cents for the half year, and expects to deliver full year earnings of around 33 cents per share, which will also be a record for the Company, based on a forecast net profit for the full year of $18 million, representing an 11% increase over the prior year.
The company’s net bank debt / equity ratio at 31 December 2006 was 72%. This ratio is at the upper end of management’s preferred range of 20 – 75%, and is in accordance with previous guidance.
Sadleir expects that the ratio will continue at the upper end of its target range for the balance of the financial year as the company embarks on new apartment projects including the Waterline Apartments at Mandurah, the second stage of Nautilus at Rockingham and The Jetty at Palm Beach.
“The Western Australian economy continues to perform strongly. The property sector in Western Australia also continued to perform well in the first half although there are signs that growth has moderated, with most commentators expecting a modest performance for the balance of FY2007.
“The company’s portfolio has continued to grow in Western Australia and Victoria and the product offer has been widened with an increasing exposure towards built form products such as town houses and apartments,” he added.
“Looking beyond FY2007, the increased contribution from current built form projects at Mandurah and Rockingham and new projects entering the development phase will supplement earnings from existing residential and commercial projects.
“The company is well positioned to continue to deliver earnings growth above 10% per annum for shareholders,” Sadleir concluded.
Yesterday, Cedar Woods shares closed 22 cents or 4.15% lower at $5.08.
Australian Property Journal
