Cedar builds profit jump
Managing director Paul Sadleir said first home buyer activity was holding up in the state, helping Cedar achieve a 65 per cent jump in net profit.
The Perth-based company has residential projects split between Western Australia and Victoria.
"Perth has certainly been on an upswing after a post-stimulus quiet period," Mr Sadleir said.
"Melbourne's at a different point in the cycle . . . since about September 2010 it's been, sort of, bumping along at very low levels after what had been a strong period."
Mr Sadleir said he was confident demand would pick up for the Victorian projects, of which three out of four are near railway stations.
Net profit in the six months to December 31 rose 65 per cent to $18.1 million, from $10.94 million during the previous corresponding period. Cedar forecast a record full-year net profit of $35 million, up slightly from $34.25 million in 2011-12. Cedar reported $70 million in pre-sales on projects due for completion in the second half of 2012-13.
But revenue in the six months to December 31 fell 5 per cent to $73.5 million.
The company has high hopes for its Williams Landing project in western Melbourne, which will integrate a Woolworths supermarket and a Masters Home Improvement store into a railway train station and freeway interchange precinct.
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Cedar Woods said a stronger Western Australian housing market and steady first‑home‑buyer activity helped drive a 65% jump in first‑half net profit to $18.1 million for the six months to December 31, according to managing director Paul Sadleir.
Cedar Woods forecast a record full‑year net profit of $35 million, up slightly from $34.25 million in 2011–12.
Although net profit rose, the company reported that revenue for the six months to December 31 fell 5% to $73.5 million. The article notes the simultaneous increase in profit and decline in revenue but does not provide further detail on the causes.
Cedar Woods reported $70 million in pre‑sales on projects due for completion in the second half of 2012–13, which supports the company’s positive outlook for the remainder of the year.
Cedar Woods splits its residential projects between Western Australia and Victoria. The Perth market is on an upswing which has helped results, while Melbourne has been at lower levels since about September 2010 — a cyclical difference the company is watching.
Managing director Paul Sadleir expressed confidence demand will pick up for the Victorian projects; three out of four of those projects are located near railway stations, which the company sees as an advantage.
Williams Landing is a western Melbourne development that will integrate a Woolworths supermarket and a Masters Home Improvement store into a precinct built around a railway station and freeway interchange — a major mixed‑use project highlighted by the company.
Cedar Woods is exposed to first‑home‑buyer activity, especially in Western Australia. The company says first‑home‑buyer activity has been holding up in WA and contributed to the strong first‑half profit, so trends among first‑time buyers can affect Cedar’s near‑term performance.
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