CDL & CDI ... Another Great Result

[Vaygor1]

Hi Forest.

I am interested in your view re CDI's dividends in lieu of cash scheme.

It appears the majority of shareholders (or at least a few of the big ones) are opted-in to this scheme so unless I am opted in too, my percentage shareholding dilutes every year unless I purchase more on the market to make up for it. Do you concur?

What if CDI were to instead retain all its earnings and pay no dividend at all? My perception is the current method of opting in or not means that the income (either in dividends or shares) is taxable but if CDI adopted a no-dividend-and-retain-all-earnings policy, then all (or most?) of this tax would be saved and this saving would eventually be reflected in the share price (as long as the company remains successful). If I am right then this would benefit the long term shareholders who don't need the dividend but on the downside would cause a further reduction in liquidity at least until the share became more widely known in the market. Is my perception correct?

Assuming I have got the above right, I would much prefer seeing my dividend non taxed (instead of taxed) and retained by CDI. They seem to be doing very well indeed. Wasn't YE2012 up 150% on YE2011? Like RYM I think there is significant hidden value in the unrealised worth of their assets.

[forest]

Hi Forest.

I am interested in your view re CDI's dividends in lieu of cash scheme.

It appears the majority of shareholders (or at least a few of the big ones) are opted-in to this scheme so unless I am opted in too, my percentage shareholding dilutes every year unless I purchase more on the market to make up for it. Do you concur?

What if CDI were to instead retain all its earnings and pay no dividend at all? My perception is the current method of opting in or not means that the income (either in dividends or shares) is taxable but if CDI adopted a no-dividend-and-retain-all-earnings policy, then all (or most?) of this tax would be saved and this saving would eventually be reflected in the share price (as long as the company remains successful). If I am right then this would benefit the long term shareholders who don't need the dividend but on the downside would cause a further reduction in liquidity at least until the share became more widely known in the market. Is my perception correct?

Assuming I have got the above right, I would much prefer seeing my dividend non taxed (instead of taxed) and retained by CDI. They seem to be doing very well indeed. Wasn't YE2012 up 150% on YE2011? Like RYM I think there is significant hidden value in the unrealised worth of their assets.

Hi Vaygor, the tax advantages of dividend or no dividend would be better answered by an accountant, but I would have thought that a company would pay company tax on retained earnings.
The present policy of a dividend reinvestment plan causes the mayor shareholder (MCK) to creep up the percentage of its ownership if they take part in the reinvestment plan and some other shareholders do not.And this has been the case. CDI and MCK are closely relations with cross over in management and directors. So one could see MCK participating in the reinvestment plan as a positive. Nobody understands CDI better than MCK.
CDI have a good cash reserve so they might not have any need to retain more earnings then they already do.

[Vaygor1]

Thanks Forest.
Much appreciated.

I decided to opt into the scheme. My father (retired) is an accountant so I will let you know once I have discussed with him re taxation.

Sorry about the delay in responding to your post. Have been sailing the last week... civilisation has been completely non-connectable until last night.

[benjitara]

The press ran a article about the Prestons subdivision getting underway yesterday with the first earthworks. This is on track with what CDL reported. Strong sales of stage 2 before any went to market so this should underpin the share price for some time yet. Their Rolleston subdivision is a general success too. solid outlook.

[Vaygor1]

Audited financial results out last week for CDI Year End 31-Dec-2013.

METRIC	YEAR END 31-DEC-2013	YEAR END 31 Dec 2012	CHANGE
Profit after tax	$13.4 million	$9.3 million	Up 44%
Profit before tax	$18.6 million	$12.9 million	Up 44%
Total Revenue & other income	$38.4 million	$26.5 million	Up 45%
Shareholders Funds	$118.9 million	$106.5 million	Up 12%
Land Holdings - Book value	$86.6 million	$83.3 million	Up 4%
Land Holdings - Independently valued	$177.5 million	$157.9 million	Up 12%
Total Assets	$120.3 million	108.0 million	Up 11%
Sections Sold	202	123	Up 64%
NTA (at book value)	43.3 cents/share	39.6 cents/share	Up 9%
Earnings Per Share	4.92 cents/share	3.50 cents/share	Up 41%
Fully Imputed Dividend	2.0 cents/share	1.7 cents/share	Up 18%

Back of envelope calc..... (Independently Valued Land Holdings - Book Value of the same + Total Equity) / No. of Shares, I get the Net Tangible Assets + 2 cent Dividend = 79 cents/share. Closing price today of $0.56c looks like a bargain to me.

Disc: Holding.

[Lizard]

One year on from last post, price is now 57cps (with 1.7cps div paid) and now have YTD stats at 27 settled and 149 unconditional (total 176) c.f. total of 101 at same time last year.... so explosive growth continues and should see more added to the share price over next 12 months.

Land holdings at year end holding up at $159.7m, although market cap has now nearly caught up at $156.6m

And another year on, price has actually gone backwards at 53cps ($146m market cap), despite higher div of 2cps. Furthermore, we now have YTD stats at 54 settled and 151 unconditional (total 205), c.f. total of 176 last year and 101 in 2012...land holdings at $177.5m and, ooh look, they have even announced that they are "well-positioned" (percy, are you collecting copyright on this phrase still???)

So, gap between value and price has re-emerged... we have net migration flows and sales YTD to support, as well as solid land bank. Looks good to me.

[stoploss]

And another year on, price has actually gone backwards at 53cps ($146m market cap), despite higher div of 2cps. Furthermore, we now have YTD stats at 54 settled and 151 unconditional (total 205), c.f. total of 176 last year and 101 in 2012...land holdings at $177.5m and, ooh look, they have even announced that they are "well-positioned" (percy, are you collecting copyright on this phrase still???)

So, gap between value and price has re-emerged... we have net migration flows and sales YTD to support, as well as solid land bank. Looks good to me.

This company is not too good on closing that Gap.
Look at MCK asset backing 130 cents plus, vs shareprice 70 cents ...

[percy]

And another year on, price has actually gone backwards at 53cps ($146m market cap), despite higher div of 2cps. Furthermore, we now have YTD stats at 54 settled and 151 unconditional (total 205), c.f. total of 176 last year and 101 in 2012...land holdings at $177.5m and, ooh look, they have even announced that they are "well-positioned" (percy, are you collecting copyright on this phrase still???)

So, gap between value and price has re-emerged... we have net migration flows and sales YTD to support, as well as solid land bank. Looks good to me.

Certainly copyright here on sharetrader.I really enjoy it when other posters throw it back at me.!!
Just love it when companies use that phrase..!!??
Just between you and me, the real give away [insider trading] is when an announcement has the word significant used more than twice.!!!! Twice means buy,Three times means raging buy.Four times,sell the house and put all you money on it.!!

[Lizard]

Certainly copyright here on sharetrader.I really enjoy it when other posters throw it back at me.!!
Just love it when companies use that phrase..!!??
Just between you and me, the real give away [insider trading] is when an announcement has the word significant used more than twice.!!!! Twice means buy,Three times means raging buy.Four times,sell the house and put all you money on it.!!

Thanks, percy! You just saved me a heap of time... now, instead of wasting time reading the announcements, I can just do a "control-f" on the word significant and read off the number of "finds" for the Percy Index rating!

[percy]

Thanks, percy! You just saved me a heap of time... now, instead of wasting time reading the announcements, I can just do a "control-f" on the word significant and read off the number of "finds" for the Percy Index rating!

It is the only 100% accurate buy signal that works.!!
It was brought to my attention after I read a Zintel announcement a few years ago.Nick Gordon used the word FIVE times.!!!
Not knowning "insider trading" signals at the time I mistaking only brought a modest amount of shares.However I did enjoy a fabulous ride with them.Have not seen the word used five times in an announcement since [I have been holding myself at the ready]. lol.