Western Australian property developer Cedar Woods has posted a record net profit of $45.44 million after a bumper 12 months of sales.
Net profit increased 4.2 per cent in the year to June 30 on the back of a 27 per cent surge in revenue to $222.26 million.
Cedar Woods managing director Paul Sadleir said the boost came from a 29 per cent increase in the volume of settled lots.
“That’s going to continue in the next few years. We’ve got some projects under construction in Adelaide and WA that aren’t yet providing revenue,” he said.
Pre-sales are also surging. Cedar Woods has booked $260 million in pre-sales which will settle in 2018 and 2019, a 40 per cent increase on the $184 million booked at the same time last year.
The WA-based developer has a pipeline of 11,358 units across 11 projects in Western Australia, Victoria, South Australia and Queensland covering housing estates, apartment and town house developments and some commercial operations.
There are no plans for an expansion into NSW, he said.
“We don’t need to be in Sydney. We have good representation across Australia – not that we wouldn’t go to Sydney if an opportunity came along but it’s a very hot market. We are doing land and medium-density projects and Sydney is more of a high-rise city which doesn’t suit our business model,” he said.
Earnings next year are expected to be skewed significantly to the second half of 2017-18 although first-half profit is expected to be higher than the same time last year.
Deals waiting to be booked include the Williams Landing office building sold to Centuria for $58 million. Retailer Target is shifting its workforce from Geelong to the eight-level suburban building. That sum will be booked after the building is completed in 2019.
Cedar Woods has also bought two new sites in Victoria: an 11-hectare, 135-lot development site in the new north-western suburb of Bonnie Brook, near Melton, cost $4.2 million. The company is also making its first foray into Melbourne’s inner-city market with the $9.8 million acquisition of a 1390-square-metre site in Leveson Street, North Melbourne.
The 18?? half-year distribution brings total dividends to the year to 30??, up from 28.5?? in the 2015-16 financial year.
Chief operating officer Nathan Blackburne, who has spearheaded the expansion into the eastern states, takes over as managing director next month as Mr Sadlier steps down.
Cedar Woods shares climbed 11?? to close at $5.20.