Cedar Woods Properties Limited · ASX:CWP
Cedar Woods Properties — H1 FY2011 Earnings Presentation
43 slides from Cedar Woods Properties's earnings presentation, Feb 22, 2011
Slide 1: Cedar Woods Half Year Results 31 December 2010
For personal use only Cedar Woods Half Year Results 31 December 2010 1
Slide 2: Presentation Outline
Presentation Outline For personal use only Highlights & Strategy 2011 first half results Property portfolio Residential market Outlook 2
Slide 3: Highlights
Highlights For personal use only Record first half NPAT of $24.2m (90% of full year forecast) $30m presales to settle second half Significant reduction in gearing from 36% at the end of FY2010 to 16% at 31 December 2010 Forecast FY2011 NPAT of approximately $27m, up 57% Interim dividend of
Slide 4: Strategy
Strategy For personal use only Focus on residential land development Grow funds management and joint venture opportunities Medium term expansion into other mainland states Explore regional development opportunities Develop commercial and retail components in WLTC while maintaining prudent
Slide 5: Operating Results – First Half
Operating Results – First Half For personal use only Dec 2010 Dec 2009 $m $m Lots settled 390 346 13% Revenue 96.0 60.8 58% EBIT 35.6 15.6 128% Profit before income 34.7 14.2 144% tax expense Net profit after tax 24.2 9.9 144% Earnings per share 39.8 cents 16.9 cents 136% Interim dividend per 11 cen
Slide 6: Operational Highlights
Operational Highlights For personal use only Strong first half compared to prior year reflects increased settlement program Projects performing well in respective markets Improved operating margins from price growth in Melbourne, and lower costs than budgeted No material ‘mark to market’ adj
Slide 7: Operating Results
For personal use only Operating Results 7
Slide 8: Balance Sheet Highlights
Balance Sheet Highlights For personal use only Dec Jun 2010 2010 Total assets $m 195.5 205.7 Total assets down from $205.7m to $195.5m due to strong settlements Net bank debt $m 20.7 39.7 Shareholders’ Debt dropped to $21m at end of equity $m 130.4 108.8 half, providing low gearing and Net bank
Slide 9: Strong Cash Flow
Strong Cash Flow For personal use only Cash flows related to Dec Dec Strong operating net operating activities 2010 2009 cash flow $M $M Higher revenue due to Receipts from customers 103.5 67.2 more settlements and Interest received 0.3 0.3 increased prices Payments to suppliers & (23.0) (18.8)
Slide 10: Exceeding Performance Targets
Exceeding Performance Targets For personal use only FY 11 Full year Company target FY 10 Actual forecast EPS growth 10% 52% 79% Return on equity 12% 21% 16% EBIT margin 20% 33% 25% Net debt/equity 20-75% 50% at June 30 37% 10
Slide 11: Compelling Asset Values
Compelling Asset Values For personal use only Major assets acquired before property boom Projects de-risked, under development Review of property portfolio, write down of $0.8m inventory on Waterline project in Mandurah No other impairments Share price significantly understates underlying
Slide 12: Strong Capital Management - Dividend Policy
Strong Capital Management - Dividend Policy For personal use only Dividends Paid Policy unchanged – approx 50% of full year net profit Dividend reinvestment plan (DRP) and bonus share plan (BSP) are available for the interim dividend BSP introduced and will appeal to some shareholders $30m i
Slide 13: Strong Capital Management - Bank Finance
Strong Capital Management - Bank Finance For personal use only New $110m corporate finance facility in place with ANZ, established 31 August 2010. Drawn $21m at 31 December, 2010 3 year term, expiring 31 August 2013, capacity to extend Club facility allows other banks to join As at 31 Decemb
Slide 14: Property Portfolio
For personal use only Property Portfolio 14
Slide 15: Strong, Mature Land Bank
Strong, Mature Land Bank For personal use only Portfolio of well located projects Majority of land bank acquired well before property boom and GFC, zoned with approvals Land bank in WA & VIC provides diversity Major projects mature and providing income Diverse product range Share price w
Slide 16: Majority of Land Bank in Income Generating Projects
Majority of Land Bank in Income Generating Projects For personal use only Lots in land bank by project maturity at 1st July 2010 - total 7,000 lots approx 16
Slide 17: Land bank – Geographic & Market Analysis
Land bank – Geographic & Market Analysis For personal use only By State By Product Built Form 12% VIC 39% WA 61% Residential 88% Weighted average age of land bank is 7 years 17
Slide 18: Lot Settlements by State
Lot Settlements by State For personal use only 100’s WA WA WA VIC VIC VIC 2010 2011 F 2012 E 18
Slide 19: Broad Market Appeal
Broad Market Appeal For personal use only Average prices of lots settled (residential only) Company projects performing well in a number of different markets 19
Slide 20: Market Conditions
Market Conditions For personal use only Victoria Sound fundamentals, continued State Government stimulus Strong first and second home buyer sales Population growth/lack of rentals (supply/demand fundamentals) Strong price growth, now easing WA Resource projects continuing – new Port Hedlan
Slide 21: Residential Market Drivers
Residential Market Drivers For personal use only Population growth – long term driver Confidence Employment Availability of finance Incentives Affordability (prices, interest rates) Rental alternative 21
Slide 22: Exposure to Growth States
Exposure to Growth States For personal use only Population Growth to June 2010 % GROWTH ‘000’s NSW 1.5 VIC 1.8 QLD 2.0 WA 2.2 22
Slide 23: For personal use only
Source: ABS, Cat. 3101 For personal use only Aug-00 Aug-02 Aug-04 Aug-06 Aug-08 Aug-10 WA and Vic residential property sector supported by strength in labour markets 23 Source: ABS, Cat. 6202
Slide 24: Market Drivers
Market Drivers Underlying Requirements for Housing vs Dwelling Completions For personal use only Source: HIA 24
Slide 25: Forecast Investment Growth in Western Australia
Forecast Investment Growth in Western Australia For personal use only Source: ABS 5203 and Dept of Treasury & Finance, WA 25
Slide 26: Positive Outlook
Positive Outlook For personal use only Record $27m NPAT forecast for FY11 (up 57% on FY10) Strong outlook with $100m presales in place for FY12 Broad market appeal – geography, product, price point Bank facility in place to August 2013 Inbuilt growth from current projects and fully funded
Slide 27: Cedar Woods Half Year Results December 2010
For personal use only Cedar Woods Half Year Results 31 December 2010 27
Slide 28: Appendices
For personal use only APPENDICES 28
Slide 29: Project Life - Perth
Project Life - Perth For personal use only FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Rivergums Cambridge Waters Mariners Cove Mandurah Country Club Kestrels Waterline (including stage 2) The Jetty Port Mandurah (Sutton) Forrestdale Cedar Woods Wellard Carine Harrisdale Bushmead Pinjarr
Slide 30: Residential – Built Form
Residential – Built Form For personal use only 30
Slide 31: Residential – Built Form
Residential – Built Form For personal use only 31
Slide 32: Residential
For personal use only Residential 32
Slide 33: Residential
For personal use only Residential 33
Slide 34: Mangles Bay
For personal use only Mangles Bay 34
Slide 35: Bushmead – 15km from Perth CBD
Bushmead – 15km from Perth CBD For personal use only 35
Slide 36: Project Life – Melbourne
Project Life – Melbourne For personal use only FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Carlingford Williams Landing Banbury Village Camberwell 36
Slide 37: Williams Landing
For personal use only Williams Landing 37
Slide 38: Williams Landing Town Centre
Williams Landing Town Centre For personal use only Rail station and busport 38
Slide 39: Banbury Village
For personal use only Banbury Village 39
Slide 40: Carlingford
For personal use only Carlingford 40
Slide 41: Camberwell
For personal use only Camberwell 41
Slide 42: Investment case for CWP
Investment case for CWP For personal use only Well established company, experienced Board and Management Clear focus on targets and proven transparent business model Growing profits and strong balance sheet Low capital dilution during G.F.C. Well located and mature property portfolio, pres
Slide 43: Project Life
Project Life For personal use only Lots Pricing Guide Valuation Location Project Type Status Total Lots FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Remaining ($) Basis(1) WA Projects Rivergums Southern Corridor Residential Mature ## ## ## ## ## ## ## ## 1,200 650 170-185k I Cambridge Waters SE Corridor
Cedar Woods Properties — H1 FY2011 Earnings Presentation on 6ix