Ann: First Quarter FY22 Operational Update, page-4

I don't think the market liked the report... lower lows. The chart on this company is horrible - lower lows and lowers highs.

The market is obviously taking into consideration that net profit is not increasing whilst management continually spruikle
the fact that pre-sales are at highs and 39% year on year. I would like to know if all of these pre-sales are completely unconditional or are conditional contracts - those pre-sales could fade away very quickly if they are conditional contracts - especially if the property market starts turning negative territory instead of the growth experienced recently.

other comments from the MD do not provide any comfort at all, such as;

“Supply constraints and cost pressures are becoming widespread across the industry, however cost increases have mainly been offset by price rises to date, with residential property markets remaining buoyant,” managing director, Nathan Blackburne said.

In other words, any increase in revenue is being offset by construction costs increase - therefore net profit will remain the same and/or will go backwards given the additional costs associated with funds, contingency, etc.

Another concern is whilst pre-sales have been locked in at todays revenues - if construction costs continue to rise with a fixed sale price, net profits will evaporate very quickly. Why would you lock in revenue in FY23/24 if sale prices are rising. This leaves CWP very exposed to market influences including; contract collapses, construction costs rising and revenue fixed, diminishing net profits, etc.

"DEVELOPER Cedar Woods has recorded 39% year-on-year growth in pre-sales contracts to $460 million in the September quarter, as it awaits the return of migration to alleviate skills shortage and boost population growth.About 45% of pre-sales are expected to settle in the current financial year, with the balance contributing to earnings in FY23 and FY24."

Interestingly the company keeps harping on about its strong financial position to acquire sites - they have been saying this for the last 3 years!!!!! and bought bullocks compared to their 'peers'. Why does this company keep regurgitating the same lines for the last few years! Come up with something new and innovative to tell the shareholders rather than the same s#*t each announcement!

This company is in a very diabolic state and the shareprice is reflective of this. Shareholders be aware. I think more questions should be asked of management - rather than fluffy statements. Particularly given we are entering an inflationary cycle - this will break this company.

AIMO

Newbietrader