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Cedar Woods Properties Limited doubles interim profit: What you need to know

Credit: Alex Livet

Residential property developer Cedar Woods Properties Limited (ASX: CWP) has reported a strong set of interim results for the six months ending December 31, highlighting the tailwind benefits of a strong domestic new housing market.

Here are the key financial details:

  • Revenue slipped 1.1% to $77 million
  • Net profit after tax soared 100% to $18.1 million thanks to higher margin projects
  • Earnings per share up 98% to 23 cents per share (cps)
  • Fully franked interim dividend maintained at 12 cps (payment due on April 29)
  • Net tangible asset backing per share grew to $3.69
  • Net debt of $75 million

Outlook

Cedar Woods announced that it would expand the Williams Landing Shopping Centre at a cost of $6.5 million, which will include a child care facility and further retail space – this asset provides an additional revenue stream to the group and potentially a tidy profit should it be sold.

Cedar Woods also advised that it achieved pre-sales of $176 million, of which the majority are anticipated to settle in the second half.

The company has provided guidance for a record profit of $43 million for the full year.

Despite offering an attractive fully franked dividend yield and trading on a low multiple, Cedar Woods’ shares have failed to attract buying support today with the stock slipping 2% to $4.01 just before lunchtime.

It’s a similar state of affairs for peers such as Villa World Ltd (ASX: VLW), Devine Limited (ASX: DVN) and Avjennings Ltd (ASX: AVJ) which are all also trading towards their 52-week lows and in what could be described as value territory.

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Motley Fool contributor Tim McArthur owns shares in Cedar Woods Properties Ltd. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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