Yes I think NTA will not be a valuable valuation measure in and of itself. As a property developer nearly all of the the company's assets are property "stock", i.e. land at cost and capitalised development costs. The developer then obviously seeks to sell that "stock" at a healthy margin, historically 40%+ for CWP but a bit under 30% in recent years. This also partly explains your comments around the declining EBIT margin, noting that the business has a fairly fixed operating cost base.
NPAT would be a reasonably reliable proxy for the underlying cash earnings of the business imo, with the only caveat being that a significant portion of profits must be retained to fund future land purchases. You can then apply a suitable multiple of your choosing, keeping in mind that the market has generally not had high regard for ASX resi property developers.
Cheers
CWP Price at posting:
$6.37 Sentiment: None Disclosure: Held
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