A booming housing market booming and record low interest rates have property developer Cedar Woods expecting a record annual profit.
The house builder has lifted its earnings guidance to a record $41 million in the 2014/15 financial year, despite a 56 per cent drop in half year net profit to $9.1 million. Its second half performance is expected to be substantially stronger due to the timing of projects.
Managing director Paul Sadleir said $147 million in property pre-sales have been secured, most of which will settle in the second half of the year.
“We are confident of delivering a sixth consecutive year of full year profit growth,” he said.
“The company continues to build its full year 2016 pre-sales and remains well positioned to maintain earnings momentum into full year 2016.”
The major drivers of the residential property market – population growth, interest rates and employment – are encouraging, Cedar Woods said. The Reserve Bank cut its cash rate to 2.25 per cent in February and many exports are tipping another rate cut in coming months.
Cedar Woods operates in Victoria, Western Australia and Queensland, which it said all have high growth rates by world standards.
CEDAR WOODS EXPECTS STRONG END TO YEAR
* Net profit of $9.1m, down 56pct from $20.5m
* Revenue of $77.9m, down 24pct from $102.1m
* Interim dividend of 12 cents a share, unchanged