half year report and media release - amazon...

20 February 2009 Australian Securities Exchange Exchange Centre, Level 4, 20 Bridge Street, Sydney NSW 2000. Dear Sir/Madam, HALF YEAR REPORT AND MEDIA RELEASE Please find attached our half year report together with a media release and associated commentary. Yours faithfully,

Paul Freedman Company Secretary

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20 February 2009 Media Release

Cedar Woods set for a strong second half Cedar Woods Properties Limited (ASX:CWP) today released its report for the first half of FY2009. In line with the guidance provided on 13 January 2009, Cedar Woods reported a net loss of $5.6m in the first half of FY2009, reflecting the weak demand in the property market. However, the company remains confident that $85m in presales already in place will provide a significant second half profit and forecasts a full year net profit in the range of $7m-$9m. Cedar Woods’ Managing Director Paul Sadleir said that as in the last financial year, the majority of settlements and hence income will be earned in the second half of the year. “During the first half of the financial year, we commenced construction at two of our new Melbourne residential projects and have now contracted more than 370 presales with delivery of approximately two-thirds of these titles expected in the second half of the year. Construction of the initial stages is now well progressed and nearing completion.” “We have experienced a significant increase in residential sales in the first home buyer sector over the summer as a direct result of the stimuli provided by the Federal Government and Reserve Bank. However, the effect of this has yet to flow through to the broader market so we shall continue to monitor conditions and provide further earnings guidance after the end of the third quarter.” Cedar Woods continues to enjoy strong support from its bankers. The company has a $114m corporate facility in place until September 2011 and since November 2008 has put in place new finance facilities with National Australia Bank as it seeks to widen its funding base. These facilities provide ample funding for the company’s development activities for the next 3 years. In light of the first half loss, the Board has decided to suspend the interim dividend, however in anticipation of the full year profit the Board intends to maintain the current policy of distributing approximately 50% of full year net profit, which will be paid as a final dividend. The company is well placed to participate in an upswing in the market, with an excellent product range and projects located in key growth areas. Cedar Woods half year report summary • First half net loss of $5.6m, forecasting a full year net profit range of $7m-$9m • $85m in presales at projects completing in the second half • $114m bank facility in place until September 2011 • Interim dividend suspended, full year payout ratio to remain at 50% of FY2009 net profit.

ENDS For further information please contact: Paul Sadleir Managing Director CEDAR WOODS PROPERTIES LIMITED 08 9480 1500

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CEDAR WOODS PROPERTIES LIMITED

HALF YEAR REPORT AND FULL YEAR OUTLOOK SUMMARY Cedar Woods Properties Limited reported a net loss of $5.6m for the half year to 31 December 2008. The first half loss was experienced amid weak demand, particularly in Perth’s south-west sector, although activity differs markedly from sector to sector. Strong sales were experienced at a number of the company’s estates, but due to the timing of settlements, the revenue and earnings from these will not be recorded until the second half. Trading conditions have improved in response to the First Home Owners Grant and reduced interest rates, and the company has approximately $85m in presales. A number of factors will influence the company’s full year profit including:

• further sales for the balance of the financial year • completion of stages under construction and settlement of associated presales • a review of the viability of several new projects in light of changed market conditions.

In light of these factors, the company is forecasting a full year profit in the range of $7m-$9m. The interim dividend will be suspended this year, however, in anticipation of the full year profit, the Board intends to maintain the current policy of distributing approximately 50% of full year net profit, which will be paid as a final dividend. RESULTS AND FINANCIAL POSITION Commentary on the company’s projects in Western Australia and Victoria was provided in the announcement published on 13 January 2009. The operating results are summarised below:

CONSOLIDATED

Six months ended 31 December 2008 $’000

Six months ended 31 December 2007 $’000

Revenue 13,332 31,647

(Loss) profit before income tax expense (7,851) 6,546

Income tax revenue (expense) 2,282 (1,960)

Net (loss) profit after tax attributable to members of Cedar Woods Properties Limited (5,569) 4,586

Revenue was down 58% as a result of the downturn in trading conditions. Most of the fall in revenue compared to the corresponding period last year was attributable to lower sales of the company’s premium products, being canal lots and waterfront apartments which are at the top end of the market. This sector has been significantly impacted by the global financial crisis.

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Included in the operating loss was $1.2m in write downs of property options and related capitalised costs. A $0.5m loss was also experienced as a result of ‘mark to market’ adjustments for derivative financial instruments that the company had established in previous years to manage interest rate risk. The company undertook significant development works in the first half with several major stages scheduled for completion in April. Settlements of pre sales will then occur and the company anticipates debt to equity will fall to approximately 75% by 30 June 2009. ASSET VALUES The Board has reviewed the property portfolio and is confident that the total market value is substantially above the carrying value. The majority of the company’s property portfolio comprises assets acquired prior to the property boom and as a consequence, current property values for the major assets in the portfolio are significantly above the carrying values on the balance sheet. Several new projects that are still at a preliminary stage will continue to be closely monitored for the remainder of the financial year and if unviable, will result in a profit figure at the lower end of the forecast range. Like all listed property companies, Cedar Woods’ share price has been impacted by the financial crisis and the Board notes the current share price is not only significantly below the underlying portfolio value, but also below the historical cost base. FINANCING During the first half the company’s financiers increased the 3 year evergreen corporate finance facility from $98m to $114m and rolled it over for another year. Under the terms of the facility, it is available until at least 30 September 2011. The extended term provides the company protection against the need to refinance during this period of volatility in world debt markets. The company has also recently established new facilities with National Australia Bank as the company seeks to widen its funding base. Together with separate limited or non-recourse facilities for the built form projects, combined funding is in place to provide the company with capacity for future development and portfolio growth for at least the next three years. OUTLOOK Economy Growth forecasts for the Australian economy have been revised downwards as a result of the world economic downturn. The national property market has weakened over the last 12 months, however recent cuts to interest rates, the increase in the first home buyer grant and other Federal and State government initiatives have stimulated demand in the first home buyer sector. Despite the current factors impacting the property market, independent assessments of the Australian residential market by groups such as the Housing and Industry Association indicate that there is a lack of housing stock in all metropolitan markets. This will also underpin a recovery that should commence as financial markets stabilise and as interest rate cuts further improve housing affordability.

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Outlook The company is well placed to participate in an upswing in the market, with an excellent product range and projects located in key growth areas. In addition, it has $85m presales due for delivery in the latter part of the financial year. A full year net profit in the range of $7m-$9m is forecast and further earnings guidance will be provided with the third quarter update. In the medium term, the increased contribution from the Melbourne projects, new projects entering the development phase and syndicates will supplement earnings. The diverse portfolio of projects, with approvals in place, positions the company to deliver earnings growth and value for shareholders in future years. For further information please contact: Paul Sadleir Managing Director CEDAR WOODS PROPERTIES LIMITED 08 9480 1500

___________________________________________________________________________________ Cedar Woods Properties Limited 1 Appendix 4D 31 December 2008

CEDAR WOODS PROPERTIES LIMITED APPENDIX 4D FOR THE HALF-YEAR ENDED 31 DECEMBER 2008 1. Details of the reporting period

This report details the consolidated results of Cedar Woods Properties Limited and its controlled entities for the half-year ended 31 December 2008. Comparatives are for the half-year ended 31 December 2007.

2. Results for announcement to the market Dec 2008

Half $’000

Dec 2007 Half $’000

Change%

2.1 Revenue from ordinary activities 13,332 31,647 Down 58%

2.2 (Loss) profit from ordinary activities after tax attributable to members

(5,569) 4,586 N/A

2.3 Net (loss) profit for the period attributable to members

(5,569) 4,586 N/A

2.4 Interim dividend per share, fully franked

NIL 8 cents Down 100%

(Loss) earnings per share (9.9) cents 8.3 cents N/A 2.5 Record date for dividend Not applicable. 2.6 Explanation Refer to Company Announcement. 3. Net tangible assets per share Dec 2008 Dec 2007Net tangible assets per share $1.35 $1.31 4. Details of entities over which control has been gained or lost during the period Nil. 5. Details of dividends Not applicable.

___________________________________________________________________________________ Cedar Woods Properties Limited 2 Appendix 4D 31 December 2008

6. Dividend reinvestment plan Not applicable. 7. Details of associates or joint ventures Cedar Woods Wellard Limited is an associated entity. The company holds a 25% interest. 8. Accounting for foreign entities Not applicable. 9. Auditor’s review report No dispute or qualification exists in the auditor’s review report. Refer to the attached.

A B N 4 7 0 0 9 2 5 9 0 8 1

&

C O N T R O L L E D E N T I T I E S

H A L F-Y E A R R E P O R T – 3 1 D E C E M B E R 2 0 0 8

Directors’ report 3-5

Directors’ declaration 6

Independent auditor’s review report to the members 7-8

Consolidated income statement 9

Consolidated balance sheet 10

Consolidated statement of changes in equity 11

Consolidated cash flow statement 12

Notes to the consolidated financial statements 13-14

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2008 and any public announcements made by Cedar Woods Properties Limited during the interim reporting period in accordance with continuous disclosure requirements of the Corporations Act 2001.

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CEDAR WOODS PROPERTIES LIMITED & CONTROLLED ENTITIES

A.B.N. 47 009 259 081 Directors William George Hames, BArch (Hons) MCU (Harvard) LFRAIA, MPIA, FAPI (Econ) – Chairman Robert Stanley Brown, MAICD, AIFS – Deputy Chairman Ronald Packer, BCom (UWA), AAPI, FAICD, Solicitor Supreme Court of England & Wales Paul Stephen Sadleir, BE, MBA, AAPI, FAICD, FRICS, MIE Aust – Managing Director Timothy Robert Brown, BA, LLB, M.Fin (Alternate for R S Brown) Company Secretary Paul Freedman BSc, CA, GAICD Registered office Level 4, 66 Kings Park Road WEST PERTH WA 6005 Phone: (08) 9480 1500 Fax: (08) 9480 1599 Email: [email protected] Website : www.cedarwoods.com.au Share registry Computershare Investor Services Pty Ltd Level 2, 45 St Georges Terrace PERTH WA 6000 Auditor PricewaterhouseCoopers QV1, 250 St Georges Terrace PERTH WA 6000 Securities exchange listing Cedar Woods Properties Limited shares are listed on the Australian Securities Exchange. ASX Code CWP

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DIRECTORS’ REPORT

Your directors present their report on the consolidated entity consisting of Cedar Woods Properties Limited and the entities it controlled at the end of, or during, the half-year ended 31 December 2008. 1. Directors

The following persons were directors of Cedar Woods Properties Limited during the whole of the half-year and up to the date of this report: William George Hames (Chairman) Robert Stanley Brown (Deputy Chairman) Ronald Packer Paul Stephen Sadleir (Managing Director) Timothy Robert Brown (Alternate for R S Brown) 2. Review of operations The principal activity of the consolidated entity in the course of the half-year ended 31 December 2008 was that of property developer and no significant change in the nature of that activity has taken place during that period. A summary of consolidated revenues and results for the half-year ended 31 December 2008 is set out below. 2008 2007 $’000 $’000

Revenue 13,332 31,647 (Loss) profit before income tax (7,851) 6,546 Income tax benefit (expense) 2,282 (1,960) Net (loss) profit attributable to members of Cedar Woods Properties Limited

(5,569)

4,586

During the half-year the consolidated entity continued the sale of lots and units at its residential projects in Western Australia and commenced sales in Victoria. The company’s earnings from period to period are dependent upon the timing of the settlements in each development. Management’s focus is primarily on the achievement of full year results and the distribution of profits between half-years may from time to time be uneven due to the timing of settlements of significant projects. The consolidated entity extended its finance facility with Suncorp Metway Bank by way of an evergreen facility to September 2011. The facility was increased from $98 million to $114 million. The company has also recently established new facilities with National Australia Bank as the company seeks to strengthen its funding base.

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3. Auditor’s independence declaration. A copy of the auditor’s independence declaration as required by section 307C of the Corporations Act 2001 is set out on page 5. 4. Rounding of amounts The company is of a kind referred to in Class Order 98/0100 issued by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the directors’ report and financial report. Amounts in the directors’ report and financial report have been rounded off to the nearest thousand dollars in accordance with that Class Order.

This report is made in accordance with a resolution of directors.

W G Hames Chairman Perth, Western Australia 20 February 2009

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DIRECTORS’ DECLARATION

In the directors’ opinion: (a) the financial statements and notes set out on pages 9 to 14 are in accordance with

the Corporations Act 2001, including:

(i) complying with Accounting Standards, the Corporations Act 2001 and other mandatory professional reporting requirements; and

(ii) giving a true and fair view of the consolidated entity’s financial position as at

31 December 2008 and of its performance for the half-year ended on that date.

(b) there are reasonable grounds to believe that Cedar Woods Properties Limited will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the directors.

W G Hames Chairman Perth, Western Australia 20 February 2009

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CONSOLIDATED INCOME STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2008

Half-year 2008 2007 $’000 $’000

Revenue 13,332 31,647Cost of sales (10,278) (16,984) 3,054 14,663 Other income 1,318 836Other expenses: Project operating costs (5,119) (4,166)Occupancy (171) (96)Write down of non-current assets (1,223) -Administration (3,371) (3,541)Finance costs (2,258) (1,114)Share of net loss of associate accounted for using the equity method

(81)

(36)

(Loss) profit before income tax

(7,851)

6,546

Income tax benefit (expense) 2,282 (1,960) (Loss) profit for the half-year (5,569) 4,586 (Loss) profit attributable to members of Cedar Woods Properties Limited

(5,569) 4,586

Half-year (Loss) earnings per share for (loss) profit attributable to the ordinary equity holders of the company

2008 cents

2007cents

Basic and diluted (loss) earnings per share (9.9) 8.3

The above consolidated income statement should be read in conjunction with the accompanying notes.

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CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2008

NOTE 31 December 2008

30 June2008

ASSETS $’000 $’000

Current assets Cash and cash equivalents 43 486Trade and other receivables 9,958 4,983Current tax 1,017 -Inventories 44,931 40,930Total current assets 55,949 46,399 Non-current assets Receivables 159 259Inventories 127,315 121,936Investment accounted for using the equity method

3,579

3,660

Available for sale financial assets 17 21Derivative financial instruments 55 524Property, plant and equipment 883 869Investment properties 2,167 2,192Deferred tax assets 1,544 -Other 4,574 9,159Total non-current assets 140,293 138,620 Total assets 196,242 185,019 LIABILITIES Current liabilities Trade and other payables 9,564 11,672Borrowings 9,285 8,196Current tax liabilities - 3,879Provisions 2,053 2,109Total current liabilities 20,902 25,856 Non-current liabilities Borrowings 96,764 74,221Deferred tax liabilities - 738Provisions 257 258Total non-current liabilities 97,021 75,217

Total liabilities 117,923 101,073 Net assets 78,319 83,946 EQUITY Contributed equity 4 34,850 29,508Reserves 1,081 990Retained profits 42,388 53,448Total equity 78,319 83,946 The above consolidated balance sheet should be read in conjunction with the accompanying notes.

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE HALF-YEAR ENDED 31 DECEMBER 2008 Half-year NOTE 2008 2007 $’000 $’000

Total equity at the beginning of the half-year

83,946

71,643

Changes in the fair value of available-for-sale financial assets, net of tax

(6)

(2)

(Loss) profit for the half-year (5,569) 4,586Total recognised income and expense for the half-year

(5,575) 4,584

Transactions with equity holders in their capacity as equity holders:

Contributions of equity, net of transaction costs

5,342

1,473

Employee share plan 120 49Dividends provided for or paid 3 (5,514) (5,482)

Total equity at the end of the half-year 78,319 72,267

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

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CONSOLIDATED CASH FLOW STATEMENT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2008

Half-year 2008 2007

$’000 $’000 Cash flows from operating activities Receipts from customers (inclusive of GST)

15,750

34,801

Payments to suppliers and employees (inclusive of GST)

(31,883)

(33,636)

Interest received 277 55Borrowing costs (4,274) (3,371)Income tax paid (4,894) (4,779)Net cash outflow from operating activities

(25,024)

(6,930)

Cash flows from investing activities Proceeds from repayment of employee share loan

-

52

Proceeds from sale of property, plant and equipment

-

3

Payments for investments (3) (5)Payments for property, plant and equipment and investment property

(99)

(552)

Net cash outflow from investing activities

(102)

(502)

Cash flows from financing activities Proceeds from borrowings 30,875 17,947Repayment of borrowings (6,357) (6,798)Dividends paid to shareholders - (3,895)Share issue transaction costs (73) -Net cash inflow from financing activities

24,445

7,254

Net decrease in cash and cash equivalents

(681)

(178)

Cash and cash equivalents at the beginning of the half-year

486

1,112

Cash and cash equivalents at the end of the half-year

(195) 934

The above consolidated statement of cash flows should be read in conjunction

with the accompanying notes.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2008

1. BASIS OF PREPARATION OF HALF-YEAR REPORT This general purpose financial report for the interim half-year reporting period ended 31 December 2008 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001. This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report should be read in conjunction with the annual report for the year ended 30 June 2008 and any public announcements made by Cedar Woods Properties Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

2. SEGMENT INFORMATION

Half-year 2008 2007 $’000 $’000

Primary reporting format – business segment Property investment and development: Segment revenue 13,332 31,647Segment (loss) profit before tax (7,851) 6,546 3. DIVIDENDS Half-year 2008 2007 $’000 $’000

Ordinary shares Dividends provided for or paid during the half-year: Paid in cash 4,011 3,895Dividend reinvestment plan 1,404 1,473Employee share plan 99 114 5,514 5,482 Dividends not recognised at the end of the half-year In view of the half year result, the directors have recommended that no interim dividend be paid (2007 – 8 cents per share). A final dividend is expected to be paid following the completion of the financial year.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2008 (CONTINUED)

4. CONTRIBUTED EQUITY The movements in the share capital account during the period were: Half-year 2008 2007 $’000 $’000

Share capital at the beginning of the reporting period – 55,138,148 (2007 – 54,824,132) ordinary shares

29,508

28,035

Shares issued pursuant to dividend reinvestment plan – 3,025,056 (2007 - 314,016) ordinary shares issued at $1.79 (2007 - $4.69) each

5,415

1,473

Cost of issuing equity (73) -Share capital at the end of the reporting period – 58,163,204 (2007 – 55,138,148) ordinary shares

34,850 29,508

5. CONTINGENT LIABILITIES At 31 December 2008 bank guarantees totalling $3,465,939 (30 June 2008 - $3,692,939) had been provided to:

• various state and local authorities supporting development and maintenance commitments and;

• vendors securing future payments for land acquisitions included in liabilities.

half year report and media release - amazon...

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