Cedar Woods Properties (ASX: CWP) expects revenue, profitability to improve in 2HFY24

Highlights

• Cedar Woods is engaged in property investment and development across Australia
• In 1HFY24, the company’s revenue stood at AUD 123.2 million and NPAT stood at AUD 2.6 million
• Hames (William George) has the highest stake in CWP with a shareholding of nearly 12.5%

ASX-listed real estate company, Cedar Woods Properties Limited (ASX:CWP) is a property investor and developer with operations focused on Australia. The company is engaged in the development of commercial, retail and residential properties in Queensland, Victoria, South Australia and Western Australia. 

In the first half of the financial year 2024 (1HFY24), the company witnessed 19.1% decline in its revenue to AUD 123.2 million and 71.4% YoY decrease in net profit after tax to AUD 2.6 million. Revenue fell due to lower value land settlements. Lower revenue with increased finance cost impacted 1HFY24 bottom-line. At the end of 1HFY24, the company had AUD 6.7 million in cash and cash equivalents, up 36.7% on pcp.

Presales during the half surpassed the companys expectations as it reached over AUD 525 million, compared to AUD 509 million in 1HFY23.

Top 10 shareholders of CWP

Th top 10 shareholders of CWP have around 46.11% shareholding in the company, while the top four have nearly 35.99% shareholding. The highest stake is held by Hames (William George) with a shareholding of nearly 12.5%, followed by AustralianSuper Holding with a shareholding of 11.27%.

Recent business update

On 21 February 2024, the company notified that it has agreed to sell its Williams Landing Shopping Centre, Victoria for a consideration of AUD 60 million, excluding GST. The settlement is expected to take place on 15 March 2024 for the shopping centre component, and the surplus land component is expected to settle in 2HCY24.

From this development, the company is expected to generate net profit after tax of around AUD 16.8 million.

Outlook

The company expects to see an increase in demand for residential property and sales, backed by increasing population, national housing shortage in the near future and low unemployment.

Moreover, the demand for new housing is expected to be supported by moderating interest rates and inflation. The company highlighted that it has a strong foothold in the more affordable markets across Australia and is well placed to take advantage of growing demand across all types of residential product.

In FY24, the company expects to deliver NPAT of around AUD 36 million to AUD 39 million.

Share performance of CWP

CWP shares closed 2.09% lower at AUD 4.69 apiece on 12 March 2024. With this, CWP’s share price has surged by almost 9.32% in the last one year and has fallen by nearly 7.68% in the last six months.

The 52-week high of CWP is AUD 5.66, recorded on 15 August 2023, while the 52-week low is AUD 4.17, recorded on 14 March 2023.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 12 March 2024. The reference data in this report has been partly sourced from REFINITIV.

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