A Message from the Managing Director - Spring 2022

12 September 2022

Cedar Woods ended FY22 in a strong position, delivering a solid uplift in profit, with further growth targeted in FY23, across our diversified portfolio.

The Company reported a net profit after tax (‘NPAT’) of $37.4m, above guidance of $35m with presale contracts at $500m, up $22m or 5% on the record $478m reported at the end of FY21.

These impressive presales, coupled with a national pipeline of more than 10,300 dwellings, lots and offices, places Cedar Woods in a good position to grow earnings, with approximately 70% of presales expected to settle in FY23 with the balance contributing to earnings in FY24.

Sales rates across many projects slowed in recent months as the impact of interest rate rises took effect. Slower sales conditions are expected to persist over FY23 where interest rates are expected to peak, then stabilise, bringing consumer sentiment back.

The undersupply of dwellings, low rental vacancy rates and the recovery in inbound migration are expected to underpin housing demand in the medium term, so the outlook for our business is positive.

The construction sector continues to experience supply constraints and cost pressures, which are impacting developers across the nation and affecting delivery timeframes at some locations. Conditions for the construction sector are expected to improve towards the end of FY23 as high volumes of work are completed.

Cedar Woods’ projects experienced good demand for most of FY22 across jurisdictions and most product types, with strong sales and significant price growth recorded at Ellendale in Queensland and the new Victorian land projects, Mason Quarter and Clara Place. Project construction continues in all four states in which the Company operates, with numerous significant stages completed in the second half of FY22.

Cedar Woods unconditionally acquired more than 2,000 lots through acquisitions in Fraser Rise and Southbank in Victoria and Eglinton, Henley Brook and Rockingham in Western Australia. The Company also holds conditional contracts to acquire additional land holdings in South- East Queensland and Victoria, which could add up to another 800 lots to the portfolio if contract conditions can be satisfied.

We were pleased to continue our partnership with The Smith Family – Australia’s leading children’s education charity. Employees were engaged in various activities throughout the year including The Smith Family Toy and Book Appeal, programs such as ‘Straight Talk’ career information sharing for Year 6 students, and the ‘Dream Run’ and the ‘Bridge to Brisbane’ fundraising and fitness activities.

Moving into FY23, Cedar Woods is in a good position, with solid presales and a diversified, high-quality portfolio that caters to a broad customer base.

The Company’s expectation for FY23 full year earnings takes into account known delays, although there remains some residual risk that a limited number of forecast FY23 stage completions, and hence revenue, may move into early FY24.