Originally Posted by
traineeinvestor
Some preliminary thoughts:
1. even though cash/deposits and cash flow would easily allow payment of an interim dividend, I wasn't expecting any change to the past practice of only paying dividends annually (and I'd be surprised if anyone else was either)
2. the result was a solid one - in spite of the slow down on the residential property market and rising interest rates, the company still managed to maintain sales at a decent level. Given the policy of holding property in the books at cost rather than market value, it's difficult to make year-on-year comparisons on margins
3. the level of development property has increased from NZD186 million to NZD197 million. Again, given the differing times at which this inventory was acquired it's difficult to compare one year with another but it looks like they are not depleting the land bank
4. investment property has increased from NZD23 million to NZD33 million. As yet, the income from investment property is de minimus (NZD84K in the half year) but over time this can be expected to rise as the properties are completed and leased out. As a shareholder, I hope the company will continue to expand the investment property portfolio - at present investment properties represent approximately 11% of net assets
5. we will have to wait for the annual report to come out in about six months and read the notes to the accounts to see the market values of the portfolio but I would like to know whether they will continue to value all properties at cost (and show the difference in the notes to the accounts) or whether they will mark the investment properties to market (like other property companies do)
6. cash and deposits are at NZD 65 million. Although down on the NZD 83 million six months ago, the difference is explained by increases in development and investment properties. As a side note, rising interest rates will benefit the company. Finance income picked up in the six months in spite of the lower cash/deposit balance and should be even higher in the second half (subject to any investments they may make)
Very happy to continue holding.