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Half Year FY20 Financial Results 19 February 2020 About Cedar - - PowerPoint PPT Presentation
Half Year FY20 Financial Results 19 February 2020 About Cedar - - PowerPoint PPT Presentation
Half Year FY20 Financial Results 19 February 2020 About Cedar Woods: Company Overview S&P ASX 300 property company; market capitalisation of ~$640m. Products: land estates, townhouses, apartments & commercial. 9400+ lots in
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About Cedar Woods: Purpose, Vision, Values
Geography Price Point Our purpose & vision have interconnected objectives: Reliable & growing income streams for investors; Quality housing or offices for customers; Vibrant communities for our customers to be part of; A high spirited and safe workplace for staff; and A loyal business partner to suppliers. 2019 Staff Survey Results: 93% have clarity on our Vision, Purpose, Values 84% are satisfied / very satisfied with their role 88% would recommend Cedar Woods as a place to work
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About Cedar Woods: How we create value
Geography Price Point
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About Cedar Woods: Our Strategy
To grow & develop our national project portfolio, diversified by geography, product type & price point, so that it continues to hold broad customer appeal & performs well in a range of market conditions. Geography Price Point
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About Cedar Woods: Strategic Priorities – FY20 Progress
Geography Price Point
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Continued support from our 3 banks with facilities recently extended - ANZ, Bankwest & NAB; gearing at low end of target range; Significant capacity to fund growth. Pivoted towards growth to capitalise on favourable buying conditions – 5 sites acquired in 18 months. Developing leading, integrated systems to create efficiencies, superior controls, real time data, & workforce mobility; Strong safety record; Projects with excellent sustainability credentials. Strong culture serving as form of advantage; staff surveys demonstrating high satisfaction levels.
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Earnings growth: Recent Acquisitions
Geography Price Point 5 sites acquired in past 18 months; 3 of them in 1H FY20: ‒ Wollert VIC (500 lots) ‒ Hamersley WA (200 lots) - conditional ‒ Subiaco WA (apartments / townhouses) Disciplined, counter cyclical buying – favourable prices & terms Locations with strong relative demand for new housing Fewer bidders due to finance constraints for some developers Significant additional capacity to acquire more projects with several under review
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Wollert, VIC
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Financial: Performing through the cycles
A strong track record of consistent profitability & fully franked dividends
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Financial: FY20 H1 Summary
Net Profit
$10.2m
Down 67% weighted to H2 as expected Total Revenue
$128.8m
Down 37%, weighted to H2 as expected Earnings Per Share
12.7c
Down 67% weighted to H2 as expected Interim Dividends
12.5c
Down 31% weighted to final dividend
Presales Contracts
$340m
Down 5%
Share Price
Up 38%
30 Jun 2019 to 31 Dec 2019
Settlements
330 lots
Lots / homes / offices settled in H1
Net Bank Debt to Equity
37.9%
At the low end of target range
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Financial: Balance sheet strength & access to funding
31 Dec 2019 30 Jun 2019 Total assets (book value) $644.7m $571.7m Net assets (equity) $377.8m $376.5m Net assets per share (book) $4.70 $4.70 Net bank debt $143.3m $105.3m Net bank debt to equity 37.9% 28.0% Net bank debt to total tangible assets (less cash) 22.5% 18.9% Finance facilities $235.0m $235.0m Finance facilities headroom $72.8m $101.2m Interest cover (annual) 6.9 x 8.6 x
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Our Portfolio: Summary
Price Point
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9,400+ lots/dwellings/units 34 projects 4 states - VIC, WA, SA, QLD Land estates, townhouses, apartments & commercial projects High amenity locations & often located adjacent to train stations Projects positioned as quality developments within their respective markets
Fletcher’s Slip
Bushmead, WA
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Our Portfolio: Diversified by product & location
Geography Location
# lots/homes/offices
Product Type
# lots/homes/offices 12
State Lots/units % SA 1,454 15% QLD 862 9% VIC * 1,873 20% WA 5,240 56% Total 9,429 100% Product Lots/units % Commercial * 136 1% Townhouses 855 9% Apartments 1,882 20% Land 6,556 70% Total 9,429 100% * Excludes additional 17ha land in Williams Landing for future projects.
56% 20% 9% 15%
WA QLD VIC SA
70% 20% 9% 1%
Townhouses Land Apartments Commercial
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Market Conditions: Sector drivers
Population growth1 GDP growth2 Unemployment3
VIC 2.1% 2.50% 4.9% QLD 1.7% 2.50% 5.7% WA 1.1% 3.00% 5.4% SA 0.9% 1.75% 6.2%
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Notes: (1) ABS: Australian demographic statistics June 2019, (2) State Treasuries: Forecast FY20 Gross State Product growth per FY2020 Mid Year State Budget Reviews, (3) ABS: December 2019 seasonally adjusted unemployment.
Macro conditions remain supportive
Two interest rate cuts, pushing mortgage rates to record lows, & the prospect of further falls; APRA’s relaxing of mortgage stress tests, improving availability of credit; Federal Government’s Loan Deposit Scheme; Federal & State Government infrastructure spending; Tax cuts for some income segments.
Stimulus also supporting market
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Market Outlook & Cedar Woods Experience
Conditions expected to improve across most markets
Market Outlook Cedar Woods’ Experience
Melbourne Brisbane Perth Adelaide Melbourne
FY20
Brisbane
FY20
Perth
FY20
Adelaide
FY20 Increasing owner occupier enquiry & sales, but investors remain quiet Land estates selling well but apartment & townhouse sales slow Incremental price growth in Williams Landing & Carlingford Strong population growth driving demand Clearance rates continue to be high Excess stock being absorbed but sales volumes remain well below peak Established housing performing well, with median prices close to peak levels; new housing still recovering. Relatively strong price growth forecast Strong population growth–especially from interstate Unemployment rate has materially reduced over the December quarter Established housing performing better recently Prices affordable compared with Melbourne & Sydney suggesting scope for growth Relatively strong price growth forecast Improving employment conditions- mining employment approaching previous peak Highly competitive in some corridors Tightening rental market; low vacancies Strong new home sales increase from a low base in the three months to Nov 2019 Submarine & shipbuilding is expected to boost economic activity from 2021 Substantial government infrastructure investment underway Low rental vacancies & improving rents but housing market remains steady Enquiry & sales have marginally improved over the course of H1 Owner occupiers active but investors remain inactive Bushmead & Ariella, north of Perth performed well over H1 in contrast to southern corridor projects where sales remain slow. Prices & incentives stable with potential for margin growth as the market gradually improves Fletcher’s Slip townhouse sales slow in H1 but have improved in 2020 so far Glenside apartment sales slow in H1 with a new launch expected in H2 offering more floorplan options New stages of Glenside townhouses to occur mid 2020
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Our Projects: Western Australia
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15 projects & more than 5,200 lots / dwellings Projects catering for a range of buyer types Land subdivision, townhouses & apartments 2 new developments delivering first contributions in FY21 (Solaris & additional Ariella land) Cedar Woods has strong leverage to WA
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Our Projects: Western Australia highlights
Ariella
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Ariella Ariella
Ariella (Brabham)
880 lots, in north-east growth corridor Strong sales continuing Price range $175,000 - $320,000 Increased project life extended to FY25 with acquisition of additional 20 hectares in FY19
Salvado Road, Subiaco
1.44 ha site, 4.5km west of Perth CBD Sought after inner suburb with strong relative performance Mix of townhouses and apartments proposed Development application for townhouses being prepared for lodgement soon Sales launch planned for FY21
Early concept image – Subiaco
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Our Projects: Victoria
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13 projects (6 currently at Williams Landing) More than 1,800 lots / dwellings / offices + 17 hectares of commercial / apartment sites Land subdivision, townhouses, apartments & commercial projects Acquired 43 Ha, over 500 lots in Wollert in H1 FY20
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Our projects: Victoria
101 Overton Rd - strata office Lancaster Apartments
Artist’s impression
18 95 Overton Road Office for Pre-lease
Artist’s impression
Target Australia Headquarters 101 Overton Strata Office 101 Overton Strata Office
Artist impression
Target Australia Headquarters
Williams Landing Up to 10 years remaining project life Diverse mix of land, townhouses, apartments & commercial developments Numerous projects underway (apartments, commercial, residential lots) including 2 office developments Jackson Green (Clayton South) 570 townhouses & apartments Townhouse component completed Huntington, 165 Apartments commenced construction Apartment price range $380,000 - $700,000
Jackson Green
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Render view from stage 1 terrace homes Ellendale
Our Projects: Queensland
19 Wooloowin Ellendale
Ellendale (Upper Kedron)
228 ha site, 12km west of Brisbane CBD 900 lots now approved, over 360 lots now sold Price range $266,000 – $550,000 Market conditions have improved in H1 FY20 Several stages settling in H2 FY20
Wooloowin
3.7 ha site, 6km north of Brisbane CBD Mix of townhouses & apartments Close to two train stations, schools & shops Revision to planning approval is well advanced Sales launch planned by mid 2020
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Our Projects: South Australia
Render view from stage 1 terrace homes Glenside 20 Glenside
Glenside
17ha, 3km from Adelaide CBD Around 1,000 dwellings - townhouses & apartments 8-10 year project duration 59 townhouses settled, first apartment building 80% sold First apartment building settlements mid-2020, second building designed Three industry awards in 2019
Fletcher’s Slip (Port Adelaide)
14km north west of the CBD Around 500 dwellings, mostly townhouses Adjacent to train station & close to submarine building precinct 49 townhouses sold to date Site preparation works underway with completion mid 2020
Fletcher’s Slip
Artist impression
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Outlook
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Established housing improving & this is expected to flow through to new housing during 2020 Favourable sector drivers - strong population growth, low unemployment, low interest rates Moderately lower earnings expected in FY20 Development program currently on track, subject to the continued availability of building materials Portfolio with high performing projects, many in high demand locations with low competition Outlook underpinned by pre-sales of $340m, with approximately half to settle in H2 FY20 WA leverage provides distinct advantage Favourable acquisitions environment, with numerous projects being assessed & capital availability Growth in earnings is expected over the medium term
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The Cedar Woods investment proposition
Geography Price Point
Stable and experienced Board and Management Track record of consistent profits & fully franked dividends Well positioned to benefit from WA turnaround Portfolio diversified across geographies, product and price point
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Disclaimer of liability While every effort is made to provide complete and accurate information, Cedar Woods Properties Limited does not warrant or represent that the information in this presentation is free from errors or omissions or is suitable for your intended use. Subject to any terms implied by law and which cannot be excluded, Cedar Woods Properties Limited accepts no responsibility for any loss, damage, cost or expense (whether direct or indirect) incurred by you as a result of any error, omission or misrepresentation in information in this presentation. All information in this presentation is subject to change without notice. “To the extent this Presentation contains certain forward-looking statements and comments about future events (including for example, projections as to project life, number of lots or price ranges), these statements are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Forward looking statement are impacted by both known and unknown risks and external factors that are outside the control of Cedar Woods. As such, undue reliance should not be placed on any forward looking statement and no representation or warranty is made by any person as to the likelihood of achievement or reasonableness of any forward looking statements, forecast financial information
- r other forecast.”
This presentation is not financial advice or a recommendation to acquire Cedar Woods Properties Limited securities and has been prepared without taking into account the objectives, financial situation or needs of individuals.
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Appendix 1: Project pipeline
Geography Price Point
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LOT/UNITS LOTS/UNITS PROJECT REMAIN (31/12/19) FY20 FY21 FY22 FY23 FY24 FY25 WESTERN AUSTRALIA - PERTH Mariners Cove, Mandurah South Residential Land and Townhouses 982 25 Ariella, Brabham North East Residential Land 880 465 The Brook at Byford South East Residential Land 428 220 Rivergums, Baldivis South Residential Land 1,411 335 Byford on the Scarp South East Residential Land 276 162 Karmara, Piara Waters South East Residential Land 153 36 Solaris, Forrestdale South East Residential Land 301 301 Bushmead East Residential Land 943 679 Millars Landing, North Baldivis South Residential Land 1,559 1,491 Pinjarra South Residential Land 1,080 1,080 Subiaco Inner East Townhouses and Apartments 111 111 WESTERN AUSTRALIA - REGIONAL Elements South Hedland Pilbara Residential Land 136 2 WESTERN AUSTRALIA - "JV" PROJECTS Cedar Woods Wellard (Emerald Park) South Residential Land 665 58 Batavia Coast Marina Apartments Mid-West Apartments 54 5 Harrisdale Green South East Residential Land and Townhouses 474 270 5,240 VICTORIA - MELBOURNE Carlingford, Lalor North Residential Land 580 67 St A, St Albans North West Townhouses 260 195 Jackson Green, Clayton South South East Townhouses and Apartments 291 121 Jackson Green, Clayton South South East Gardenia Apartments 74
- Jackson Green, Clayton South
South East Huntington Apartments 165 165 North Melbourne North West of CBD Townhouses 15 15 Wollert North Residential Land 550 550 Williams Landing West Residential Land, Townhouses, Apartments 2,407 353 Williams Landing West Lancaster Apartments 42
- Williams Landing
West Lincoln Apartments 69 69 Williams Landing West Victorian State Government Office 1 1 Williams Landing West 111 Overton Road Strata Offices 48
- Williams Landing
West 101 Overton Road Strata Offices 74 74 Williams Landing West Future Apartments / Offices / Townhouses 263 263 Williams Landing West Commercial (17 hectares)
- 1,873
QUEENSLAND - BRISBANE Wooloowin Residences Inner North Townhouses and Apartments 281 281 Ellendale, Upper Kedron North West Residential Land 900 581 862 SOUTH AUSTRALIA - ADELAIDE Glenside Inner South East Townhouses and Apartments 894 836 Botanica apartments, Glenside Inner South East Apartments 77 77 Grace apartments Glenside Inner South East Apartments 44 44 Fletcher's Slip, Port Adelaide North West Townhouses and Apartments 497 497 1,454 TOTAL GROUP 9,429 PROJECT NAME CORRIDOR / LOCATION PROJECT TYPE PROJECT LIFE Planning, Design & Rezoning Development & Sales Leasing, Development & Sales
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Appendix 2: HIA’s New Home Sales (HIA)
Geography
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200 400 600 800 1,000 1,200 1,400
Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19 Oct-19 Dec-19 HIA New Home Sales ABS Seasonally Adjusted Approvals - Private Sector
- 2.3%
Source: ABS 8731.0 and HIA
PRIVATE NEW HOUSE SALES - WESTERN AUSTRALIA (SEASONALLY ADJUSTED)
500 1,000 1,500 2,000 2,500 3,000 3,500 4,000
Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19 Oct-19 Dec-19 HIA New Home Sales ABS Seasonally Adjusted Approvals - Private Sector
- 6.9%
Source: ABS 8731.0 and HIA
PRIVATE NEW HOUSE SALES - VICTORIA (SEASONALLY ADJUSTED)
500 1,000 1,500 2,000 2,500 3,000
Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19 Oct-19 Dec-19 HIA New Home Sales ABS Seasonally Adjusted Approvals - Private Sector
- 4.5%
Source: ABS 8731.0 and HIA
PRIVATE NEW HOUSE SALES - QUEENSLAND (SEASONALLY ADJUSTED)
100 200 300 400 500 600 700 800
Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19 Oct-19 Dec-19 HIA New Home Sales ABS Seasonally Adjusted Approvals - Private Sector
+18.7% Source: ABS 8731.0 and HIA
PRIVATE NEW HOUSE SALES - SOUTH AUSTRALIA (SEASONALLY ADJUSTED)
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Appendix 3: Outlook for Dwelling Starts (HIA Nov 2019)
Geography
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- 15%
- 16%
- 6%
+28%
- 6%
- 1%
- 1%
+7%
- 10%
+7% +4% +1% +3%
- -18%
+11% +15% 0% +26%
- 12%
+53%
- 43%
+9% +4% 0%
- 11%
- 16%
- 2%
+24%
- 5%
+6%
- 4%
+21%
- 23%
+7% +4% +1% 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 (f) 2020/21 (f) 2021/22 (f)
Number ('000)
New Housing Forecast, by Type, SA Dwelling Starts
Source: HIA Economics
Houses Units Total
- 21%
- 6%
+3% +8% +14% +1% +4% +7%
- 15%
- 3%
+5% +5% +15% +5% +11% +44% +35% +19%
- 24%
- 20%
- 13%
- 6%
+17% +7%
- 19%
- 2%
+6% +22% +23% +10%
- 11%
- 5%
- 14%
- 4%
+9% +5% 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 50.00 55.00 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 (f) 2020/21 (f) 2021/22 (f)
Number ('000)
New Housing Forecast, by Type, QLD Dwelling Starts
Source: HIA Economics
Houses Multi-units Total
- 9%
- 14%
- 4%
+6% +9% +10% +1% +8%
- 5%
- 12%
- 7%
0% +43%
- 15%
+11%
- 3%
+48% +1%
- 13%
+30%
- 31%
- 24%
- 3%
+3% +7%
- 15%
0% +2% +26% +5%
- 6%
+18%
- 18%
- 17%
- 5%
+1% 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 50.00 55.00 60.00 65.00 70.00 75.00 80.00 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 (f) 2020/21 (f) 2021/22 (f)
Number ('000)
New Housing Forecast, by Type, VIC Dwelling Starts
Source: HIA Economics
Houses Units Total
- 15%
- 14%
+30% +21% +2%
- 24%
- 24%
- 6%
- 11%
+4% +12% +4%
- 27%
- 20%
+88% +12% +24%
- 9%
- 9%
- 11%
- 22%
+19% +29% +16%
- 18%
- 15%
+40% +19% +7%
- 20%
- 20%
- 8%
- 14%
+7% +16% +8% 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 (f) 2020/21 (f) 2021/22 (f)
Number ('000)
New Housing Forecast, by Type, WA Dwelling Starts
Source: HIA Economics
Houses Units Total
WA VIC QLD SA