CDL & CDI ... Another Great Result

[LaserEyeKiwi]

FWIW, my quick review of the results announcements:

1. NAV calculation: Shareholders equity of $257.1 million includes development property at the lower of cost or value. Note 8 to the accounts states that development property is valued at $286.4 million against cost of $161.4 million. As developers, the eventual realisation will be subject to tax so I have factored in 33% tax to get a net difference of $83.7 million. Adding this $83.7 million to the shareholders equity stated in the accounts and dividing by the 280.4 million shares in issue suggests NAV per share is around $1.21. This is an increase from the $1.16 NAV the same calculation produced off the back of the previous annual report.

2. dividend is stead at 3.5% fully imputed

3. cash and deposits have increased from $70.7 million to $96.7 million

4. they spent $56.2 million on land acquisitions. This is actually a very important number for CDI's business model as they depend on constantly buying more land to replace what is being sold

5. this year they have given more detail on their held for investment properties. While only valued at $3.3 million, over the longer term, I would prefer that they hold more income producing properties and less cash on the balance sheet

6. one way of looking at CDI is to note that the NAV increased from $1.16 to $1.21 - an increase of about 5 cps to which can be added the dividend of 3.5 cents for a total increase to shareholders of about 8.5 cents. Based on today's closing price that's a total after tax return of 8.5/102 = 8.3 percent.

NOTE: rounding has been done in all calculation so the final 8.3% may be a bit rough.

Overall, no surprises in either direction. CDI just keeps on doing it's thing. It's a boring steady as you go business.

Disclosure: held

Just to confirm:

Property assets market value: $286.4 million, + $96.7 million cash and deposits (no debt) = $383.1 million

Current CDL market cap: $286 million

Is that right? Currently a $97 million / 25% discount to the true asset valuation?

[traineeinvestor]

Just to confirm:

Property assets market value: $286.4 million, + $96.7 million cash and deposits (no debt) = $383.1 million

Current CDL market cap: $286 million

Is that right? Currently a $97 million / 25% discount to the true asset valuation?

On a pre-tax basis, yes.

But we need to remember that CDL is a developer so all gains in the company's portfolio of development properties will eventually be subject to tax when they sell the completed project. IMHO, the NAV calculation should reflect the tax on the difference between the cost and value of the development properties.

[podg]

any thoughts on the latest effort to arrest soaring house prices and how it might impact on CDI ?? my initial thoughts were that the infrastructure boost and the exemption from the new laws for new builds would be positive for both development of new subdivsions and the building of new homes on those subdivisions. If supply is the primary problem, then surely CDI and other developers must be part of the answer.

[traineeinvestor]

any thoughts on the latest effort to arrest soaring house prices and how it might impact on CDI ?? my initial thoughts were that the infrastructure boost and the exemption from the new laws for new builds would be positive for both development of new subdivsions and the building of new homes on those subdivisions. If supply is the primary problem, then surely CDI and other developers must be part of the answer.

My initial thoughts are much the same as far as the short term is concerned - increased demand for new sections to build on is a likely outcome. The potential downside is that the new rules will push up the cost of land to subdivide as more players try to invest in bare land for the same purpose. No idea which way it will play out.

Disclosure: holding

[Scrunch]

any thoughts on the latest effort to arrest soaring house prices and how it might impact on CDI ?? my initial thoughts were that the infrastructure boost and the exemption from the new laws for new builds would be positive for both development of new subdivsions and the building of new homes on those subdivisions. If supply is the primary problem, then surely CDI and other developers must be part of the answer.

Big rerating upside. The sort of property investor that sells out of residential property is a potential investor of that capital in CDI.

[podg]

MKTUPDTE: CDI: CDI: Sale of Auckland Land

CDL Investments New Zealand Limited (NZX:CDI) advises that it has reached
agreement with Fernbrook Property (No.1) Limited for the sale of its land at
9 Jerry Green Street, Wiri. The land is 3.8320 hectares and is currently
zoned Business - Heavy Industry Zone.

Settlement of the sale is to take place in January 2022 and the terms of sale
and sale price are both confidential to the parties.

CDI Managing Director Mr. BK Chiu said that the sale was beneficial to the
company and the proceeds would be utilised for further land purchases and
development.

No further announcement will be made by either party until settlement of the
transaction in 2022.

[beetills]

Fernbrook no 1 controlling company Rank Group.I presume Graeme Hart is still involved with Rank.

[podg]

fairly muted response at the market's opening

[podg]

i wonder why they chose to have the sale recorded in next year's results

[traineeinvestor]

Without the sale price and cost price of the land being sold, there's no way to evaluate the impact of the sale on CDI. While I would have preferred to see the company develop and retain some industrial properties for long term income, they've shown themselves to be sensible dealmakers so I'm willing to assume the deal is a good one for CDI shareholders.

No idea whether the 1.5 cents share price increase is due to this announcement or the fact that they go ex-dividend on 29 April. Either way, as someone who intends taking the DRP, it's costing me a few shares.

Disclosure: held