NZX-listed residential subdivider CDL Investments NZ Ltd has increased its investment warchest by $40 million in the last 12 months while depleting its landholdings by $20 million (at cost) over the last 18 months.
All up, the debt-free company has over $71 million ready to invest in new subdivision land when prices turn downward.
Managing director BK Chiu said that, while the housing market had shown the characteristic lower winter activity, CDL had seen continued demand in Auckland, Hamilton & Christchurch, where the company has its major subdivision projects.
“However, buyers & builders are more selective for well-constructed & located housing sections. This underlying demand remains steady in Auckland & Hamilton, where further sales are expected in the second half of 2017.”
Mr Chiu said sales were strongest in the Greville Rd subdivision in Auckland, Magellan Heights in Hamilton and Prestons Park outside Christchurch. The company has completed stage 1 of Prestons Park and is progressing with stage 2, and is preparing land in the 2 northern subdivisions for sale this year and in 2018.
CDL said on Friday it made an unaudited after-tax operating profit of $20.39 million in the June half, up 27.8% on the $15.95 million in the first half of 2016.
Pretax operating profit rose 27.8% to $28.32 million ($22.16 million) on revenue up 19.3% to $51.04 million ($42.78 million).
Property sales & other income rose 19.3% to $51.04 million ($42.78 million).
Net asset backing/share (at cost) was up 15.4% to 62.8c (54.4c).
Basic & diluted earnings/share rose 27.4% to 7.35c (5.77c).
The company has total equity of $174.3 million, comprising $54.3 million of share capital & $120 million of retained earnings, up from total equity of $161.8 million in December and $150.7 million in June last year.
Its non-current land development portfolio has been reduced from $88.7 million last June to $84.6 million in December and $79.9 million this June, while its current development portfolio increased from $32.9 million to $33.1 million in December, falling to $26.7 million this June.
CDL has increased its holdings of cash, cash equivalents & short-term deposits from $31.5 million a year ago to $71.6 million.
In December, the independent market value of CDL’s landholdings was $297 million, up $32 million in a year, but the company’s accounting policies require it to carry the value of its land portfolio at the lower of cost or net realisable value. On its last 2 year-end balance dates, the land portfolio at cost was valued at $126.6 million in 2015 and $117.8 million in 2016. In this half-year report, it was valued at $106.5 million.
CDL is 66.6%-owned by Millennium & Copthorne Hotels NZ Ltd, which in turn is 70.2%-owned, ultimately, by the Hong Leong Group of Singapore.
Attribution: Company release.