NZX-listed residential land developer CDL Investments NZ Ltd reported reduced half-year profit on slightly higher revenue last week.
Managing director BK Chiu said: “Despite 6 weeks of lockdown, we were still able to make & record sales and we are pleased with our first-half performance.”
Most of its sales came from its Auckland subdivision at Kewa Rd (North Shore) & Prestons Park (Marshlands/Burwood) in Christchurch.
This was a vindication of its strategy to focus on the areas where there was sales demand and develop as much as required to meet the market. “It sounds simple but, given the softening market last year and the extreme events caused by Covid-19, predicting demand & which areas will perform well has not been an easy matter. Having a well spread portfolio also helps.”
All 91 sections in the Dominion Rd, Papakura, subdivision have been sold after the initial launch in December 2019.
But Mr Chiu was cautious about the second half and the company hasn’t given any revenue guidance, saying consumer confidence would greatly influence the number of sales it was targeting for this year as well as 2021.
“The full economic effects of Covid-19 are yet to be felt and, while we are optimistic about how we will perform this year, the same cannot be said for everyone else and we need to be sensitive to this.”
After-tax operating profit, down 9% to $13.74 million ($15.10 million)
Pretax profit, down 9% to $19.09 million ($20.98 million)
Revenue, up 1.75% to $40.96 million ($40.29 million)
Unaudited total equity, up 11.2% to $240.77 million ($216.47 million)
Net asset backing (at cost), up 10.7% to 85.9c/share (77.6c/share)
Earnings/share, down 9.4% to 4.91c (5.42c)
Dividend, unchanged at 3.5c/share
Land development & purchase forecasts for the whole of 2020 (2019 full year in brackets):
Development expenditure, down 9.8% to $19.16 million ($21.25 million)
Land purchases, down 96.2% to $1.27 million ($33.72 million)
Total land expenditure, down 62.8% to $20.43 million ($54.97 million)
Attribution: Company release.