Archive | CDL Investments

Scottish fund manager lifts stakes in Millennium & Copthorne and CDL

Published 7 September 2018
Scottish investment manager Aberdeen Standard Investments Ltd has lifted its stake in 2 NZX-listed companies controlled by the Hong Leong Group of Singapore – to 13.24% for its stake in Millennium & Copthorne Hotels NZ Ltd and 8.38% in CDL Investments NZ Ltd.

Aberdeen Standard previously held 12.9% of hotel owner & operator Millennium & Copthorne and 7.45% of residential property developer CDL.

The increases are disclosed in advice of a name change for Aberdeen Standard’s Asia subsidiary. Aberdeen Standard itself is the result of a merger last year between Aberdeen Asset Managers plc, headquartered in Aberdeen, and Standard Life Investments plc, of Edinburgh.

Millennium & Copthorne Hotels NZ Ltd is a 75.78%-owned (last year 75.2%) subsidiary of Millennium & Copthorne Hotels plc in the UK and CDL is 75.8% owned by Millennium & Copthorne Hotels NZ. The ultimate parent company is Hong Leong Investment Holdings Pte Ltd in Singapore, with 70.2% ownership.

In other Aberdeen Standard news this week, the investment manager said it had agreed 2 deals for its Pan-European Residential Property Fund for a total investment of €120 million. Aberdeen Standard launched the fund in March after raising an initial €355 million, and now has a portfolio of 610 apartments in operation or being developed in Denmark, Austria & France.

Aberdeen Standard had total investments of €629.9 billion at 30 June.

Link:
Aberdeen Standard

Attribution: Aberdeen Standard releases.

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CDL lifts profit by 25% despite big spend on new land

Listed residential land developer CDL Investments NZ Ltd settled the purchase of over 100ha of new development land in the June half-year and still lifted net profit by 25%.

NZX-listed CDL is 75.8%-owned by Millennium & Copthorne Hotels NZ Ltd, which in turn is 70.2%-owned, ultimately, by Hong Leong Investment Holdings Pte Ltd in Singapore.

The development company increased its issued capital by $550,000 during the half-year through the dividend reinvestment plan, but that was a small contribution to its net cash position. CDL had $120 million of retained earnings in June 2017 and increased that figure to $186 million at 31 December, and again to $202.4 million at 30 June 2018.

It increased net profit by $5.1 million (24.9%) to $25.5 million during the latest half-year.

Managing director BK Chiu said on Thursday the 100ha bought in Hamilton & Christchurch would secure CDL’s development future for the medium term, adding: “We continue to evaluate other opportunities and are optimistic that we will be able to add to our portfolio later in the year.”

Mr Chiu said section sales were at the Greville Rd subdivision in Auckland, Magellan Heights in Hamilton & Prestons Park in Christchurch, and the company was also looking at developing commercial premises for lease on its land: “These will be smallscale developments that are compatible with the residential areas & local community. We have seen demand for childcare centres & medical centres around our subdivisions and we are looking at concept drawings now and talking to interested parties about tenancies for 2020.”

Mr Chiu was optimistic that CDL would better its 2017 results in the 12 months to December 2018: “Although we are seeing some softening in forward demand, sales continue to be steady.”

Financial highlights (unaudited; June 2017 half in brackets):

Revenue up 18% to $60.2 million ($51 million)
Gross profit up 25.3% to $37.1 million ($29.6 million)
Pretax profit up 24.9% to $35.4 million ($28.3 million)
After-tax profit up 24.9% to $25.5 million ($20.4 million)
Basic & diluted earnings/share up 24.6% to 9.16c (7.35c)
Net asset backing up 15.9% to 72.8c/share (62.8c/share)
Equity up 16.1% to $202.4 million ($174.3 million)
Development property holdings up 51.9% at cost to $121.3 million ($79.9 million)

Operating cashflows:

Receipts from customers $58.5 million ($52.6 million)
Purchase of development land $36.4 million (zero)
Net cashflow, short-term deposits reduced from $46.5 million to $15.5 million ($45.5 million to a negative $6.5 million)
Net cash inflow from operating activities $1 million after $25.8 million increase in development properties ($32.2 million after $11.3 million decrease in development properties)
Net cash inflow from operating activities $1 million after $25.8 million increase in development properties ($32.2 million after $11.3 million decrease in development properties)

Related story today: Hotelier lifts profit 24%

Attribution: Company release.

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CDL lifts dividend on 19% profit rise

CDL Investments NZ Ltd lifted after-tax profit by 19% in the year ended 31 December, from $27 million to $32.2 million – the 8th consecutive year of profit growth for the company. And, like its majority shareholder, Millennium & Copthorne Hotels NZ Ltd, it’s also lifted its dividend.

Profit before tax increased to $44.7 million ($37.5 million). Property sales & other income rose 5.6% to $78.7 million ($74.5 million).

Shareholders’ funds as at 31 December increased to $186.1 million ($161.8 million) and the company’s total assets stood at $191.7 million ($168.3 million). The net tangible asset/share (at book value) was 67.1c (58.4c). Earnings/share were 11.6c (9.77c).

Reflecting the record result, CDL has increased its fully imputed ordinary dividend to 3.5c/share (3.0c/share). The dividend reinvestment plan will apply.

Land portfolio

At 31 December, the independent market value of CDL’s landholdings was $276.3 million ($297.0 million). The company’s accounting policies require it to carry the value of its land portfolio at the lower of cost or net realisable value and, at year end, the land portfolio at cost was $124.7 million ($117.8 million).

Outlook

New chair Colin Sim said the New Zealand housing stock & new housing supply remained short of demand: “This can explain why, while housing sales have eased, pricing has only evened out. The Reserve Bank’s loan:value ratio (LVR) restrictions & the availability of finance have both had an effect on the New Zealand housing market. That said, although not as strong as in 2016, demand for CDL housing sections remained steady in 2017.

Mr Sim expected the Overseas Investment Amendment Bill, which the Government proposed in December, to have minimal impact on CDL’s business model of acquiring land for residential development.

“The proposed new Government measures classifying residential housing land as ‘sensitive land’ is a demand-side measure and aimed ‘not to impede the broader objective of increasing the supply of residential housing’. As a development company in housing sections, CDL has consistently demonstrated its ‘financial commitment, business experience & acumen & good character’ with its commitment to increasing the supply of sections for housing.

“The Overseas Investment Amendment Bill in its current form may, however, have unintended consequences. These include the number of consent applications & time required to process them. Both measures are expected to increase, with significant delays & costs to the housing industry.”

Attribution: Company release.

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CDL more than doubles land investment warchest

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.

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Section sales boost CDL return

A 33.6% jump in residential section sales lifted returns right through CDL Investments NZ Ltd in the June half, and flowed through to the returns for Millennium & Copthorne Hotels NZ Ltd (see separate story).

CDL Investments lifted its pretax operating profit by 89% to $22.16 million ($11.7 million), and after-tax by 87% to $15.95 million ($8.51 million).

Property sales & other income rose by 79% to $42.78 million ($23.89 million). Net asset backing (at cost) rose 14.3% to 54.4c/share (47.6c/share).

The company increased section sales by 33.6% to 171 (128). Company chair Wong Hong Ren said demand was strongest in Auckland & Canterbury. The company has completed the last stage of its Rolleston subdivision in Christchurch, Stonebrook, and expects to complete final sales by the end of 2016.

Mr Wong said the current level of sales activity should continue in the second half of the year.

Attribution: Company release.

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CDL launches Prestons Park

NZX-listed residential property developer CDL Investments NZ Ltd launched the sales programme for its Prestons Park development in Christchurch yesterday.

The development sits on 75ha between Prestons & Mairehau Rds, 6.5km north-east of the Christchurch cbd, and is part of the 203ha Prestons subdivision, which is designed to be a sustainable urban village containing 2500 houses for 8000 residents. It’s a joint-venture development between Ngai Tahu Property Ltd, CDL Land & Foodstuffs South Island Ltd.

CDL Investments managing director BK Chiu said CDL’s launch was the culmination of nearly a decade’s work of acquisition, planning & development. The first 52 sections went on the market yesterday, out of a total first stage of 260 sections and a total 730 over the 75ha.

Attribution: Company release.

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Corrected: Propbd on Q Th30July15 – 4 units sell at Ray White auction, CDL slips, Heartland on track

4 apartments sell at Ray White’s
CDL Investments makes modest gain
Heartland expects profit at top of guidance range

Corrected 31 July:
CDL Investments NZ Ltd’s after-tax result fell 3.6%. I wrote yesterday that it rose by 3.6%. The actual profit figures are unchanged.

2.07pm:
4 apartments sell at Ray White’s

4 of the 5 cbd apartments taken to auction at Ray White City Apartments today were sold under the hammer. Auction results:

The Crescent, 36 Eden Crescent, unit 101, sold for $370,000, sales agents Mitch Agnew & Krister Samuel
Aura, 53 Cook St, unit 1102, passed in at $351,000, Daniel Horrobin & Damian Piggin
Altitude, 34 Kingston St, unit 8H, sold for $316,000, Leo Zhu
Fiore, 152 Hobson St, unit 602, sold for $409,000, Aileen Wu
The Quadrant, 10 Waterloo Quadrant, unit 1318, sold for $280,000, May Ma & Mark Li

Corrected: CDL Investments slips

Correction: I wrote yesterday that CDL made a modest gain of 3.6%, when its after-tax result was down 3.6%.

CDL Investments NZ Ltd’s after-tax operating profit fell by 3.6% in the first half to $8.2 million ($8.5 million last year), on pretax profit up 2.6% to $11.7 million ($11.4 million) and revenue down 4.1% to $23.9 million ($24.9 million).

The company sold 128 sections in the latest period, down from 133 this time last year.

Net asset backing increased by 7.4% to 47.6c/share (44.3c).

Chairman Wong Hong Ren said the listed land developer expected to start sales at its Prestons Rd subdivision outside Christchurch by the end of the year. The company has started earthworks on its 100-lot Kewa Rd subdivision, off Lonely Track Rd beside the Northern Motorway at Albany Heights.

Heartland expects profit at top of guidance range

Heartland NZ Ltd said today it expects net profit after tax for the June year to be about $48 million, at the upper end of the guidance range of $46-48 million.

The company intends to announce its annual result on Tuesday 18 August.

Chief executive Jeff Greenslade also said today that, given heightened market interest in the dairy sector, the banking company’s exposure to dairy was 7.6% of its total lending book: “The average loan:value ratio (LVR) for Heartland’s dairy exposures is 61%. However, it is important to note that LVRs are only one of the indicators of loan quality.

“Where Heartland’s dairy clients are experiencing financial stress as a result of lower dairy payout forecasts, we are actively working with them to fund working capital shortfalls where appropriate and ensuring they have access to appropriate support, including emotional support through the Rural Support Trust & Farmstrong.”

Heartland’s preliminary forecast range for net profit after tax in 2015-16 is $51-55 million, including an allowance for estimated impairments.

Attribution: Auction, company releases.

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CDL lifts return

CDL Investments NZ Ltd increased net profit after tax by 9.7% last year to $14.7 million ($13.4 million in 2013), on the sale of 248 sections (202).

The NZX-listed land subdivider increased pretax profit by 10.7% to $20.5 million ($18.6 million) on revenue up 15.2% to $44.2 million ($38.4 millio).

Shareholders’ funds rose $9.6 million to $128.5 million, total assets $10.2 million to $130.5 million, net tangible asset value (at book value) 3.3c to 46.6c/share and earnings/share to 5.35c (4.92c).

The company will pay an increased fully imputed ordinary dividend of 2.2c/share (2c/share) on 15 May and the dividend reinvestment plan will apply.

At 31 December, the independent value of CDL Investments’ landholdings was $206.0 million ($177.5 million). The company acquired 4.1ha in Auckland during the year.

Attribution: Company release.

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CDL lifts sales & profit, warns of market softening, buys more land in Auckland

CDL Investments NZ Ltd has lifted its half-year operating profit before & after tax by 43.3%.

Before tax, the increase was from just under $8 million to $11.4 million. After tax, the increase was from $5.7 million to $8.2 million.

CDL increased property sales & other income by 62.3%, from $15.4 million to $24.9 million, and lifted net asset backing at cost from 40.5c to 44.3c/share.

Chairman Wong Hong Ren said yesterday CDL lifted section sales from 68 in the first half last year to 133 this year, at its developments at Harrowglen in Auckland, Magellan in Hamilton and Stonebrook in Rolleston, Christchurch. The company also acquired a further 4.1ha in Auckland.

Mr Wong said the company had completed additional stages at its Hamilton & Rolleston subdivisions, and earthworks were well advanced at the Prestons Rd subdivision in Christchurch, with civil works starting.

Despite the strong performance, Mr Wong said the market showed signs of softening. However, the company was targeting a comparable profit level to last year, given the level of unconditional sales it has on hand.

Attribution: Company release.

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CDL says it needs big cash holding to replenish stocks

CDL Investments NZ Ltd rejected a shareholder claim at the annual meeting yesterday that it had capital lying idle which could be distributed or put to other use.

CDL, one of 2 NZX-listed companies controlled by the Hong Leong Group of Singapore, had total assets of $120 million at its 31 December balance date, including $33 million in cash, and $119 million of shareholders’ equity. Its liabilities totalled just $1.47 million.

But managing director BK Chiu said buying development land wasn’t cheap: “We had a look at a piece of land – $40 million. So a chest of $25 million, even $40 million, is not big, and we need to replenish our land base.”

The chairman, Wong Hong Ren, said it was important for the company to seize opportunities when they arose, but also to be able to ride out low points in the cycle, as it had done during the global financial crisis.

CDL lifted section sales from 123 in 2012 to 202 last year. First-quarter settlements rose from 22 last year to 54 this year, and first-quarter unconditional agreements rose from 153 to 205.

Longtime director Rob Challinor retired at yesterday’s annual meeting. Mr Challinor, 72, a chartered accountant, corporate advisor & investment banker, was a director of CDL for 9 years. He was a partner at Deloitte for 17 years before moving into a number of business fields, including directorships of numerous prominent entities.

Picture: CDL’s latest Auckland subdivision, on Greville Rd, Albany.

Attribution: Annual meeting.

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