The Cedar Woods Properties Limited (ASX: CWP) share price could be one to watch after the company revealed strong sales conditions are driving record property presales. At close of trade on Monday, Cedar Woods shares were trading at $6.52, down 2.69%
Let's take a closer look at what the property developer reported.
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What did Cedar Woods announce?
The Cedar Woods share price will be in the spotlight after the company advised its projects in South Australia and Queensland are experiencing very strong sales conditions. This has resulted in a "near-sellout" of available land lots at locations including Ellendale and Greville in Queensland, and Glenside and Fletcher's Slip in South Australia.
To meet demand, the company said that additional sales releases will be planned in the coming weeks.
Elsewhere, Victorian land lots at Wollert and townhouses at St A. and Williams Landing are also performing strongly, with an increase in interest in apartments and office properties.
The company advised that its Victorian apartment projects, Lincoln at Williams Landing and Aster at Jackson Green, have both surpassed presales hurdles to begin construction, with settlements expected to occur by mid-2022.
In the release, Cedar Woods advised that Western Australia faced softer sales conditions in April, following the end of the government's housing stimulus packages in March 2021.
Pleasingly, Western Australia has seen sales rebound through May and June.
Finally, Cedar Woods said that strong sales are expected to continue into FY22 at its seven land estates across metropolitan Perth. The company highlighted its Incontro estsate in Subiaco, where townhouses are nearly sold out and first apartments are expected to be released in 1Q22.
Financial impact
The positive updates across Cedar Woods' property portfolio have driven presales to a record $439 million as at 31 May 2021.
The company said that these presales figures are up more than 20% on the $360 million balance recorded at 30 June 2020.
The presales will be settled in future financial years.
Management commentary
In response to the strong results, Cedar Woods managing director Nathan Blackburne said:
New stage releases across our portfolio, which are scheduled for the first quarter of FY2022, will extend sales momentum and underpin revenue growth in future financial years.
Cedar Woods share price performance
The Cedar Woods share price has had a relatively flat year-to-date performance, up by about 4%.
Despite underperforming the broader S&P/ASX 200 Index (ASX: XJO), the company has performed strongly from an operational and financial perspective.
Its third-quarter operational update on 29 April revealed a 53% uplift in forecast net profit after tax for FY21 to approximately $32 million, driven by an increase in presale contracts.
The positive update lifted the Cedar Woods share price up by 5.5% on the day to $7.45.
The company's shares have since drifted around 12% lower to yesterday's closing price.
