Why the Cedar Woods (ASX:CWP) share price is in focus

The real estate developer has just announced it's achieved record presales across its Australian properties.

| More on:
real estate agent handing over keys to couple having just bought new home

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

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.

Kerry Sun has no position in any of the stocks mentioned. 
The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Real Estate Shares

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Real Estate Shares

ASX 200 stock slips on $482 million retail deal

The ASX 200 stock is expanding its retail holdings by almost half a billion dollars.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Mergers & Acquisitions

Guess which ASX All Ords share just rocketed 91% on $374 million takeover news

The ASX All Ords stock is in the takeover crosshairs at a significant premium.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Real Estate Shares

1 ASX dividend stock down 50% I'd buy right now

I think owning this business can help Aussies who are building wealth.

Read more »

Mini house on a laptop.
Real Estate Shares

2 ASX 200 real estate shares being bought up by directors

Are these insiders onto something?

Read more »

two businessmen shake hands amid a backdrop of tall buildings, indicating a share price movement or merger between ASX property companies
Real Estate Shares

2 ASX 200 real estate shares making big news on Thursday

These two ASX 200 property stocks are grabbing headlines today. But why?

Read more »

Group of successful real estate agents standing in building and looking at tablet.
Opinions

Should ASX REITs be on your buy list right now?

Analysts offer their views.

Read more »

A man and a woman stand on an external balcony in a dense city environment filled with high rise buildings and commercial properties. The man is pointing up at a high rise building and the woman is looking on.
Real Estate Shares

Here's 1 ASX 200 share that could soar in the next bull market

Brokers like the tailwinds behind this company.

Read more »

A business woman flexes her muscles overlooking a city scape below.
REITs

Why ASX property shares could be set for a comeback

The recovery could be strong, too, according to one global investment giant.

Read more »