CDL Investments New Zealand Limited Analysis

Overview

CDL Investments New Zealand Limited is an Auckland-headquartered land development company which undertakes development os land into residential subdivisions.

With a current land bank in excess of 230 hectares (as at December 2012), it has active development sites in Auckland, Hamilton, Hawkes Bay and Canterbury.

The company has its origins in the former cashed up Kupe Group, changing its name and acquiring land in the early 1990s in various sites around New Zealand, notably from state owned enterprise Landcorp. Over the past twenty years, it has made significant other land purchases and successfully completed numerous subdivision projects in Auckland, Hamilton, Tauranga, Havelock North, Nelson, Christchurch, Rolleston (Canterbury) and Queenstown.

It is majority owned by NZSX-Listed Millenium & Copthorne Hotels New Zealand Limited (NZX:MCK) and is part of the Hong Leong group of companies which is headquartered in Singapore.

Performance

The following information was extracted from CDL Investments NZ Limited's half year results, released on 7 August 2024:

Financial Performance

On behalf of the Board, I am pleased to advise that CDL Investments New Zealand Limited (“CDI”) made an unaudited operating profit after tax of $2.74 million (2023: $5.02 million) for the six month period ending 30 June 2024. Our operating profit before tax improved to $ 9.21 million (2023: $6.98 million) which came from an increase in our property sales and other income for the period of $16.61 million (2023: $11.97 million). These positive results translated into an increase in our Net Asset Backing (at cost) for the period of 105.20 cents per share (2023: 104.99 cents per share).

As we announced last week, our profit after tax was affected by a one-off non-cash adjustment of $3.91 million due to the change of government policy on the depreciation of commercial buildings. This taxation adjustment has no impact on our trading performance or cash flow.

Operationally, we are satisfied with our performance over the last six months. Our key metrics reflect the start of recovery in the residential property markets. Our target remains improving our 2023 results despite the impact of the non-cash taxation adjustment and based on what we are seeing across our developments, we are currently on track to do so through additional sales which we expect to settle before the end of the year.