- Real estate developer Cedar Woods reports strong results for first half of FY2021.
- Performance is expected to improve (assuming market conditions remain positive).
- During the first half of FY2021, the company successfully launched four new projects across the country.
Real estate developer Cedar Woods has reported strong results for the first half of the financial year 2021 (FY2021), achieving a net profit after tax (NPAT) of $22.4 million (compared to $10.2 million in the previous corresponding period).
During this time, the company successfully launched four new projects across Australia, (1) the Incontro project to establish a $500 million revival of the Subiaco area (2) the Greville townhouses project in Queensland (3) the Aster apartments project in Victoria, and (4) the Glenside townhouses project in South Australia (which achieved record prices).
Overall, the company recorded 582 settlements during the first half of FY2021.
Cedar Woods’ Managing Director, Nathan Blackburne said the first half performance results were very pleasing. He attributes the strong performance to the diversification of the company’s property portfolio, in addition to the fiscal and monetary stimulus provided by the government (see this article for more on government stimulus and its effects on the housing sector).
“We remain in a strong position with a solid balance sheet, low gearing and significant undrawn finance facilities as we continue to assess acquisition opportunities in a number of markets to boost our portfolio and future earnings.
“Low levels of supply and pent up demand in some markets have helped ongoing sales activity, seeing Cedar Woods record very healthy presales of more than $380m.”
Second-half earnings performance is expected to be lower than the first half. This is because many of the company’s projects that were delayed in FY2020 were approved in the first half of FY2021, hence heavily skewing earnings towards that financial period.
Although second-half earnings performance is expected to be lower than the first, Mr Blackburne said, “…we expect strong growth in earnings for the full year, subject to market conditions remaining positive.”
These expectations are based on a number of assumptions including (1) the spread of COVID remaining under control in Australia (2) the effective rollout of vaccines in 2021, and (3) state and national border reopenings.
If these assumptions are correct, the company is currently forecasting a full year NPAT of $29 million.