CDL & CDI ... Another Great Result

[blackcap]

I haven't done the calcs but I think this sale finally fixes CDI's breach of NZX rules regarding minimum percentage requirements for public holding. When Adrian owned 10%+ of the business, his holding (according to the rules) was deemed non-public.
This just my preliminary view.

I concur with that. Problem was he was on the DRP and others were not or something like that. Good to see him under that 10%. I do not take it as a sign of weakness.

[podg]

Stakes bought by interests out of Aberdeen. Canny wee lads.

[Vaygor1]

And as the thread states another Great Result.
H1 operating profit up 25% on last year's H1
Ref https://www.nzx.com/announcements/321580

[BlackPeter]

And as the thread states another Great Result.
H1 operating profit up 25% on last year's H1
Ref https://www.nzx.com/announcements/321580

Quite boring isn't it? I guess their earnings grow every year by roughly 20% ... who would want to own such a predictable company? Just not enough excitement and nail-biting involved.

Ah yes ... and their property portfolio alone is still more worth than the total market cap. People should not be fooled by the NTA (which is close to the SP) based on book value counting assets at the lower of purchase or market value).

But I guess we better stop making noises here. Some gems better stay hidden ; Looking forward to a long and quiet period until we get another two (or three) posts at the annual results.

[podg]

Quite boring isn't it? I guess their earnings grow every year by roughly 20% ... who would want to own such a predictable company? Just not enough excitement and nail-biting involved.

Ah yes ... and their property portfolio alone is still more worth than the total market cap. People should not be fooled by the NTA (which is close to the SP) based on book value counting assets at the lower of purchase or market value).

But I guess we better stop making noises here. Some gems better stay hidden ; Looking forward to a long and quiet period until we get another two (or three) posts at the annual results.

First mention of building ... then taking on tenants for, a commercial property. Is this a move to a new revenue stream? Adding the likes of a medical centre or childcare centre to a subdivision, then leasing it. Interesting development. Will not appear on the balance sheet till 2020 or later. Still not sure what might push the sp through the $1 mark. Will have to wait till next year probably, and how an increase in profitability and dividend might be received by the market.

[BlackPeter]

First mention of building ... then taking on tenants for, a commercial property. Is this a move to a new revenue stream? Adding the likes of a medical centre or childcare centre to a subdivision, then leasing it. Interesting development. Will not appear on the balance sheet till 2020 or later. Still not sure what might push the sp through the $1 mark. Will have to wait till next year probably, and how an increase in profitability and dividend might be received by the market.

You are right - this mentioning of providing commercial space in their subdivisions was quite interesting. Imagine a medical center, child care, some retail space, some food outlets, a gym ... nothing to limit the imagination. Properly done this can be not just another nice little earner through the lease, but it will as well enhance the value of the properties they sell.

Not too fussed about the $1 barrier. They did pay me so far every year 20% plus in dividends and appreciation - i.e. the $1 can't be that far away, but who really cares?

[podg]

You are right - this mentioning of providing commercial space in their subdivisions was quite interesting. Imagine a medical center, child care, some retail space, some food outlets, a gym ... nothing to limit the imagination. Properly done this can be not just another nice little earner through the lease, but it will as well enhance the value of the properties they sell.

Not too fussed about the $1 barrier. They did pay me so far every year 20% plus in dividends and appreciation - i.e. the $1 can't be that far away, but who really cares?

Well, i'm hoping the market cares, or more specifically, recognizes the value in CDL. It might also attract more investors, small, medium and large, to look at the prospective returns and decide to join the share register. All positive outcome, going forward.

[Vaygor1]

Well, i'm hoping the market cares, or more specifically, recognizes the value in CDL. It might also attract more investors, small, medium and large, to look at the prospective returns and decide to join the share register. All positive outcome, going forward.

CDL appear to have a policy of playing everything down.

• Pay dividends only once per year
• Pay a pittance of a dividend compared to what their free cashflow allows
• Hang on to all those imputation credits until the cows come home
• ​Maintain a massive time gap between dividend announcement and dividend payment
• Control via MCK and (I believe) Adrian Ho, of a greater percentage of the company than perhaps they are allowed
• Provide NTA based on book value (always way below market value for the vast majority of their land portfolio)
• Put across great results like they're no big deal
• ​Provide a more subdued forward guidance than necessary
• Keep announcements to the market to an absolute minimum
• Do nothing to increase their market liquidity

On top of the above, my opinion is they have developed a habit of announcing an over-exuberant H1 result (this time around, H1 operating profit & revenue up 25% on the Previous Corresponding Period) when there is no audited financial report to back it up. Having no audited report suppresses the impact on the SP than would otherwise be the case. This H1 result then sets the background expectation for a 25% increase for the FY audited result, which will not be met when it finally arrives. The impact of not meeting this background expectation, under audit, also has the effect of (along with all the reasons bulleted above) suppressing the sharemarkets reaction to a very positive FY result.

I hope, unlike past years, I am wrong about this. But I won't be holding my breath and continue to believe market recognition will not be forthcoming.

Despite the above I am a happy holder. One can do a lot worse on the bourse.

[percy]

Yes holding CDL, or in my case MCK, gives my portfolio a company with solid growing earnings on very low multiples,with a high NTA.
Also exposure to land development,and the travel sector with their hotels.
If the share price growth over the past 5 years, continues for the next 5 years we will be well rewarded.

[podg]

I agree with most of your points Vaygor1. I have been with CDL since before they were CDL and have often wondered why they are so low-key on what have been some great results over the years. The dividend announcement/payment gap is odd, to say the least, but doesn't break any market rules that I am aware of.

On balance, I would prefer a company I have a stake in to downplay a good result, rather than overstate a poor one.

That said, the NTA at book value and holding the imputation credits continue to be a frustration. What would it take to change these two factors? Do the new shareholders (Aberdeen) have a plan in this regard? We shall see ….