It's just my curiosity. CDI as a property developer, how come it doesn't have any mortgage held?
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It's just my curiosity. CDI as a property developer, how come it doesn't have any mortgage held?
Their net assets are probably worth double the current shareprice.
They seem on track to post a record profit this year.
The dividend should at least hold steady
I'd be very surprised to see record profits given the first half was well down on last year, but I agree they have a big stash of land to develop, a wad of cash to buy more land, and they continue to trade at amazing multiples.
I had an interesting read through their old GFC financials - it looks like if the **** really hits the fan the company will just hibernate, sit on their land, and emerge in spring. No debt, apparently low fixed overheads, solid company.
Reread the half yearly they are expecting a solid second half
They won't want to end their 7 year run of increasing profits.
I'll be very happy to be proven wrong, but with first half sales down by 1/3 I doubt they will be able to recover sufficiently in the second half. Commentary states conditions are challenging and the market is soft despite believing the second half will improve on the first.
I'm sure they would like profits to increase again, but they don't necessarily get to decide that if conditions are against them. With a PE based on last year's results of about 6, the market is clearly pricing in some reduce profits. I still hold and am confident they'll do nicely in the long term.
One concern is CDI largest shareholder is MCK. MCK has properties at global presence. If, say, there is economic recession in next a couple of years, and MCK get into trouble. Is it possible MCK take cash from CDI?
The only clean way to do it is distributions to MCK and then MCK does a distribution to its shareholders etc.
The distribution could be a dividend, share buybacks or similar.
There's also dirty distribution methods whereby CDL makes loans to the parent but i think that would need shareholder approvals.