CDL & CDI ... Another Great Result

[podg]

Well, it would possibly support the other factors playing a part in the daily record high share price. Or perhaps it would show there is not the justification for such a high share price right now. The trading volume, or lack of it is, of course, a fly in that ointment, as you correctly point out.

[Bob50]

The NTA of this company (at cost price - not true value) in the last annual report was 91.7 cents. This figure has increased constantly each year by 6-9 cents. The last five years NTA was 58.4 , 67.1 , 75.7 , 84.5 and now 91.7cents.

Share price exceeded NTA in 2018 by 30 cents( a higher premium then the following years, some years this premium is only 10cents or less in dips) this seemed to be an over step as little or no capital gain for the next 3 years.

If NTA at next years annual reports increases by a record amount - say 12 cents - it will be an NTA of 104cents. Add an typical premium of 20 cents and I think you have a fair value early next year of 124 share price with a 4cent dividend on the way.

Side note. I drove past their 5 unit commercial centre in Rolleston today - all empty apart from one lonely empty small dairy type thing.

Disclaimer I am disappointed I didn’t buy more last spring and haven’t bought any since.

[LaserEyeKiwi]

The NTA of this company (at cost price - not true value) in the last annual report was 91.7 cents. This figure has increased constantly each year by 6-9 cents. The last five years NTA was 58.4 , 67.1 , 75.7 , 84.5 and now 91.7cents.

Share price exceeded NTA in 2018 by 30 cents( a higher premium then the following years, some years this premium is only 10cents or less in dips) this seemed to be an over step as little or no capital gain for the next 3 years.

If NTA at next years annual reports increases by a record amount - say 12 cents - it will be an NTA of 104cents. Add an typical premium of 20 cents and I think you have a fair value early next year of 124 share price with a 4cent dividend on the way.

Side note. I drove past their 5 unit commercial centre in Rolleston today - all empty apart from one lonely empty small dairy type thing.

Disclaimer I am disappointed I didn’t buy more last spring and haven’t bought any since.

not sure you can ascribe a “typical premium” to NTA with CDL.

like you say, NTA only values the land assets at cost, which is fairly meaningless given the value created by CDL once they onsell it as residential sections, along with the market value of residential sections changing in the interim period between purchase of bulk land and sales of residential sections as new subdivisions.

[podg]

all empty apart from one empty small dairy type thing ?? so all empty or one empty ?

[Bob50]

4 of 5 units vacant. The one occupied unit is a dairy - empty of customers.

[podg]

Interest rate expectations may have had some say in what could have been some profit-taking today. understandable i suppose. tho i can't see an interest rate change doing much to solve the demand and supply issues in the property sector.

[traineeinvestor]

Interest rate expectations may have had some say in what could have been some profit-taking today. understandable i suppose. tho i can't see an interest rate change doing much to solve the demand and supply issues in the property sector.

Any increase in interest rates is IMHO a good thing for CDI:

1. earn more on the cash they have on the balance sheet

2. may make some of the less liquid land bankers pull back reducing competition for new land

However, both would be immaterial in the overall scheme of things.

Agree that I don't see any changes in supply and demand.

[podg]

Any thoughts on the Havelock North announcement? Big chunk of land. So plenty of work ahead in the next few years.

[traineeinvestor]

Any thoughts on the Havelock North announcement? Big chunk of land. So plenty of work ahead in the next few years.

Purchase price was not disclosed but the announcement describes it as "a very significant acquisition" so has to be meaningful. I'm happy to see some of CDI's cash pile being deployed and, based on that record, have confidence that the shareholders will do well when the time comes to realise the resulting subdivisions.

Disclosure: hold

[Southern Lad]

Any thoughts on the Havelock North announcement? Big chunk of land. So plenty of work ahead in the next few years.

I’m guessing that the purchase price may be at least $1m per hectare, so has used up a fair chunk of cash on hand. Depending on subdivision section average size and lie of the land in terms of space required for roads and reserves, there may be 1,000 sections to be developed. In terms of not swamping the market, I’m assuming these will be developed and sold over quite a few years.

Decision of MCK to participate in the DRP and muted CDI May 2021 dividend level now makes sense.

Given yesterday’s announcement stated that settlement had already occurred, I’m surprised the continuous disclosure rules didn’t require an announcement as soon as the purchase was unconditional.

OIO approval disclosure in due course may detail the land purchase price.

Overall I’m happy that CDI have secured a significant land holding in a very desirable area, which will underpin their development pipeline for years to come.