I would now like to hand the conference over to Nathan Blackburne, Managing Director. Please go ahead.
Good morning and welcome to the presentation of the FY 2026 full-year financial results for Cedar Woods. My name is Nathan Blackburne, and with me is our CFO, Leon Hanrahan. In this presentation, we will provide an overview of the company and its activities, our financial results, the outlook for the new housing sector, our portfolio, and then we will finish with the outlook for our business. Cedar Woods has built a strong reputation over many years as a disciplined developer of large-scale residential projects, and that has a consistent track record of delivering both earnings growth and sector-leading shareholder returns. Today, we have 36 projects across four states and more than 9,600 lots, apartments, and commercial opportunities in our pipeline. This scale, combined with our diversified product mix and broad customer base, positions us well to perform across different market conditions.
We are delivering approximately 1,100 dwellings and residential lots per year, and we have a good pipeline of projects to support future earnings. Importantly, we maintain a conservatively geared balance sheet and continue to leverage strategic partnerships to expand the business in a capital-efficient manner. These foundations, combined with favorable long-term housing fundamentals, continue to underpin our confidence. Now to a summary of our FY 2026 financial results. FY 2026 was another strong year for the business. We delivered a record net profit after tax of AUD 65.6 million, up 36% on the prior corresponding period. Revenue increased to more than AUD 502 million. Earnings per share rose 33%, and dividends per share increased 34%. Operationally, we achieved 1,326 net sales and 1,068 settlements during the year. Pre-sales at the year-end stood at a record of AUD 830 million, providing excellent earnings visibility for future periods.
Over 90% of the settlements we need for FY 2027 have already been sold and contracted, and we are making good progress with the sales needed even through FY 2028. We also replenished and expanded the portfolio through acquisitions that added more than 1,100 lots to our future pipeline. Leon will cover off on our financials in more detail shortly. Our strategy remains unchanged and has served the company well through a range of market cycles. We focus on building a geographically diversified portfolio, offering a broad range of product types and price points. This diversification reduces risk, broadens our customer base, and allows us to respond to changing market conditions across the country, and is a key differentiator for our business. The strength of the Cedar Woods model is our integrated approach. Value creation begins with disciplined acquisitions supported by comprehensive research, conservative assumptions, and structured risk management.
From there, we focus on quality project design and delivery, respectful stakeholder management, and a strong sales and marketing platform that maximizes demand and conversion. This approach has consistently delivered attractive returns while maintaining prudent risk settings. Partnerships are becoming an increasingly important part of our growth strategy. They enable us to accelerate growth, improve returns on capital, diversify funding sources, and generate recurring fee income. Further diversification and greater scale allow the company to perform even more consistently through the cycles. We have relationships with QIC and Tokyo Gas Real Estate. The three projects we have recently completed with Tokyo Gas performed above exp ectations, and our plan is to expand the partnering component of the business. Now on to ESG highlights. Sustainability and community outcomes remained integrated into the way we develop projects.
During the year, we progressed a range of initiatives, including innovative energy solutions, affordable housing projects, and our community grants programs. Cedar Woods also continued its national partnership with The Smith Family, Australia's leading children's education charity. We also continued preparations for mandatory climate-related reporting and maintained a focus on workplace culture and employee engagement. I will now hand over to Leon.
Thanks, Nathan, and good morning, everyone. Looking at the full-year results in more detail, higher revenue and growing margins have resulted in a much-improved profit outcome for FY 2026. Revenue was up 8% for the year, notwithstanding fewer settlements due to improved pricing and, to a lesser extent, a different product mix that settled. Gross margin improved to 30%, up from 28% in the prior year, and group margin is expected to be stable into FY 2027. Project operating costs are lower, largely due to savings in landholding costs. Also with lower marketing costs incurred than planned. Higher admin costs in FY 2026 were associated with increased headcount and incentives as we reward performance and continue to invest in new projects, reflecting our accelerated acquisition strategy.
Finance cost expense were lower than the prior period as a result of lower average debt, gains on interest rate hedges, and higher capitalization of interest, which reflects the stage of our developments. Now taking a look at key elements of the balance sheet and the capital position of the business. Total assets at 30 June of AUD 884 million were up AUD 26 million on the prior year balance, reflecting the net growth in our property inventory. Net assets and equity were up 11% from 30 June 2025, largely reflecting the full-year results earning less dividends paid in the period. While group debt increased modestly to support growth and acquisitions, finishing the year at AUD 157.7 million, gearing remained conservative at 18% on a net bank debt to total tangible assets less cash basis.
Gearing is currently at the lower end of our target range and is expected to remain at comfortable levels throughout FY 2027, in the absence of new acquisitions that are not currently under consideration to date, and expected to finish the year in 2027 around 20%. The company extended the tenure of its three and five-year corporate finance facilities during the year, ensuring continued secure long-term funding availability with an average debt maturity of three years. We maintain a strong liquidity position with significant facility headroom available at year-end, and interest cover at eight times, comfortably above our facility covenant of two times. I will now hand back to Nathan.
Thanks, Leon. I will now touch on the performance of our portfolio and the sales conditions that we are experiencing around the country. FY 2026 saw record inquiry and sales activity despite a noticeably softer market in the final quarter. During the year, we received more than 30,000 inquiries, up 25% on FY 2025. While gross sales increased 5% to a record 1,521 lots, homes, and offices that were sold. Affordable and mid-priced land products were the strongest performers. Conditions weakened during the fourth quarter across all states as buyer confidence was impacted by rising interest rates, the Middle East conflict, and taxation changes. Importantly, the weaker fourth quarter numbers were also explained by lower marketing spend, which generates less inquiry and sales, as well as low stock volumes at the time. Anticipating this slowdown, we focused on securing sales further ahead of settlement and successfully built a larger book of pre-sales.
As a result, more than 90% of our FY 2027 targeted pre-sales are already contracted, providing strong earnings visibility for the year ahead. Most of the sales we are doing now are to support FY 2028 and FY 2029. Whilst sales have slowed, we expect to have ample time to secure the sales we need for FY 2028. The weaker conditions evident in Q4 have continued thus far into FY 2027. Investors and owner-occupier numbers have been impacted. Although in pockets, investors outnumber owner-occupiers, especially in Victoria. Sales cancellations remain at near record lows across the business. We are confident that significant underlying latent demand exists for our projects, which will again flow through to inquiry and sales once buyers have recalibrated to the new fiscal settings and market dynamics. We expect FY 2027 margins to be broadly in line with FY 2026 margins.
Over the past three years, prices for many projects increased by over 30% in most markets, resulting in the very strong margins we have across these projects today. Prices increased by even 50% at some projects around the country. Some pricing pressure is to be expected given the strong price growth and margin growth experienced, and we have taken this into account in providing guidance for FY 2027. The housing market is currently experiencing weaker conditions, with higher interest rates and other factors weighing on buyer confidence and sales activity. We expect these conditions to persist through much of FY 2027. However, the longer-term fundamentals remain very supportive. Australia continues to face significant housing shortages. Population growth remains strong and unemployment is low. All of which support underlying housing demand. Government incentives continue to assist first-time buyers, an important customer segment for Cedar Woods.
Whilst interest rates are expected to ease during 2027, historically, confidence and sales activity improve once rates peak and begin to climb. With more than 9,600 lots and dwellings in our pipeline and a strong presence in growth markets such as Western Australia and Queensland, we believe Cedar Woods is well-positioned to benefit when market conditions improve. The Victorian market arguably provides the greatest upside for Cedar Woods, with that market yet to experience the price growth achieved elsewhere and making it the most affordable major capital. I now wanted to provide some insights into our portfolio. The portfolio remains highly diversified by geography, product type, and customer profile. Residential land lots continue to represent our largest product category, while owner-occupiers and first-home buyers remain our dominant customer groups. This diversified structure provides resilience and reduces dependence on any single market or product segment.
These charts demonstrate that diversification in our portfolio. Our Western Australian portfolio has been benefiting from strong economic conditions and a chronic housing undersupply. Our WA portfolio is comprised of nine projects with a mixture of residential lots and apartments, and we are in a good spread of locations north and south of the CBD. Sales were strong for most of the year, and prices grew significantly, again improving margins even further. Demand slowed in the fourth quarter and remains subdued in FY 2027 thus far. In Victoria, we currently have 13 projects which offer a wide range of products, including land lots, townhouses, apartments, and offices. We have over 10 hectares of high-value mixed-use land at Williams Landing that remains undeveloped and is expected to accommodate a further 1,000+ dwellings and strata offices. Victoria remains a medium-term growth opportunity.
Market conditions have been soft as in other states, although three of our Victorian projects have been generating good sales, and prices grew modestly in recent months. We have eight projects in Queensland and a total of 2,133 lots and dwellings to deliver. There is a mix of land estates, townhouses, and apartments in this portfolio. Our projects here performed strongly for much of FY26, but like the rest of the country, slowed in Q4, and those slower inquiry and sales numbers are still evident in FY27 to date. We have a strong presale book in Queensland, so are expecting strong Queensland contributions again in FY27. Prices grew strongly in FY26 in Queensland as well, further improving margins. The demand and price growth for affordable land product has been very good. The construction sector in Queensland continues to experience capacity constraints, especially with apartment builders on the Gold Coast.
Queensland is expected to come good as sentiment improves, supported by migration, employment growth, and a limited supply of housing. South Australia delivered another solid contribution with continued demand across our portfolio there. The state enters FY 2027 with a visible settlement pipeline and significant future development opportunities. Sales conditions were good for most of the year but slowed down in the fourth quarter as per the other states. In total, we have over 1,600 townhouses, apartments, and residential lots yet to deliver, a pipeline which will keep us busy for approximately a further eight years. Our South Australian projects are well-established with strong reputations for quality and sustainability and will continue to make meaningful contributions in coming years. Maintaining a strong development pipeline is critical to supporting long-term growth, and acquisitions remained a major focus throughout FY 2026.
In the prior year, we implemented an accelerated acquisition strategy and successfully secured six sites, adding 1,184 lots to the portfolio. This has further strengthened our future earnings pipeline and increased the proportion of land subdivision projects within the portfolio. Importantly, acquisitions activity has continued into FY 2027 with the expansion of our high-performing Bushmead estate in WA. We also have a number of additional opportunities that are currently under due diligence. We are now focusing our efforts on master-planned community sites and townhouse sites. At this stage, we are open to opportunities in all four states, noting that the housing undersupply is nationwide. Our strong balance sheet and disciplined acquisitions process positions us well to continue to prudently replenish and grow the portfolio. Now to the outlook for our business.
Looking ahead, we are confident in the short and medium-term outlook for the business. Australia continues to face a significant housing undersupply while population growth and low unemployment provide strong support for underlying demand. Interest rates are forecast to fall in 2027, and we expect this to be a catalyst for improved sentiment and higher sales volumes. We enter FY 2027 from a position of strength with a strong balance sheet, ample liquidity, and a successful acquisition program that continues to replenish and expand our portfolio. Importantly, we have a record AUD 830 million in pre-sales contracts in place, including approximately AUD 290 million pre-sales that will settle in FY 2028 and FY 2029, providing significant earnings visibility beyond the current year. We are targeting FY 2027 NPAT growth of 15%, building further upon the 36% growth delivered in FY 2026 and 19% delivered in FY 2025. This brings us to the end of our results presentation.
We are now happy to answer any questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. The first question today comes from Michael Armstrong with Bell Potter. Please go ahead.
Hi, Nathan and Leon. Just of the AUD 290 million plus pre-sales for 2028 and 2029, I know it's early days and subject to change, but are you able to give an indication of how much of this will land in each period.
Of the total balance, about 30% we're expecting in FY 2028, and there's just over AUD 50 million in FY 2029. In saying that, the AUD 50 odd million for FY 2029 relate to a building that has PC currently in June 2028. That's practical completion. So there is a possibility that all of those could settle FY 2028, but that's not our base assumption at this stage, where we have AUD 50 odd million landing in FY 2029.
Okay. Thank you. Just on the admin costs. I know you called out that 2026 had the impact of increased headcount.
Can we expect this trend to continue in 2027, or is headcount expected to be more stable this year.
Michael, we expect the headcount to be largely consistent with FY 2026. There is an increased volume of activity in place across the business in terms of acquisitions, delivery, sales, marketing. So there may be a minor increase, but I wouldn't expect it to be in line with the increase experienced from 2025 to 2026. To talk to admin costs more broadly, we could see some growth in those admin costs as we have some investment into some IT projects and some system things, albeit headcount's not necessarily ramping up.
Okay, thanks. So, growth in 2027, but less than what came through in 2026.
Something like that.
Cool. Thank you.
The next question comes from Larry Gandler with Shaw and Partners. Please go ahead.
Hello, can you hear me.
Yes.
Oh, thank you very much. Nathan, Leon, just a couple questions for me. First, with regards to your property page in the appendix, just if you can help me understand Williams Landing. If you can kind of run through what the status of that whole site is, what are sort of the major developments or revenue generators you'll have for FY 2027 and maybe 2028 there?
Yeah. For FY 2027, we're doing a small stage of townhouse lots. So we have about seven, eight settlements there. We'll also have some settlements from our completed strata office building, Hudson Hub, around sort of 15, 20 settlements there. And the latest thing we're doing now is a new product for us, office warehouse, which we're in market selling, and it's selling quite well. That will settle late 2028, early FY 2029.
Larry, there's about 10 hectares of mixed-use land around the train station yet to be developed. That can accommodate around 1,000 apartments or strata offices or similar products. The site has what's called a priority development zone, a PDZ, giving it ultimate flexibility in what uses are delivered on any particular site and without any height limit.
So we'll look at any particular site, look at where we think the highest and best use is, and structure a development approval around that. So at any point in time, we can have apartments going at the same time as townhouses and office warehouse product or office product. It's fair to assume that in that land alone, there's another eight-plus years of development left to go, depending upon Melbourne's recovery, and the take-up of apartments in that location.
Great. Thanks. A couple more questions from me, if I can. Just on the same thing with the properties. Southbank, FY 2029 is coming into view. I think it was originally slated for sale, settlement around that time. Can you talk to Southbank?
Southbank, we are preparing for the launch of that project. It has got the planning approvals. It has got the branding in place. In that market, the capacity in the construction sector is much greater. There are many larger-scale builders with the capacity to deliver that project that we are talking to. We will go through a 6-12 month pre-sales campaign, then subject to those pre-sales, get it under construction, and then we will have a couple of years' worth of delivery, and then it will settle.
Yeah, we expect to be in pre-sales in the coming months. All our materials are ready to go, just going through the final process. That could be late FY 2029 or early FY 2030 settlement.
Okay, great. Last question from me, probably for Leon. It looks like the FY 2027 pre-sales are AUD 540 million.
Thereabout.
Yeah. That suggests that sales growth might be around AUD 40 million. If I just assume a 30% margin and a 70% tax rate, then assume that kind of drops all over the bottom line, it is like 13% of your 15% NPAT growth. These are all my numbers. The point being is it seems like a substantial portion of your FY 2027 guidance has been pre-sold. Are there any detracting factors like you have got those extra staff or other cost elements that we should think about?
Yeah. Like you said, we're very well sold and secured for FY 2027. More than 90% of full-year revenue is contracted in pre-sales. As we said on the call, we're expecting margin similar-ish in FY 2027, relatively stable. As I mentioned to Michael earlier, we'll have some modest growth in admin and operating costs, but we'll get operating leverage because of the higher revenue and higher gross margin. That will spit out the guidance number, circa AUD 75 million, that 15% profit growth.
Are you going to have any
There's no
Oh, sorry. Are you going to have any more openings and releases for FY 2027, or is that done and dusted?
There's still a few more releases to do to achieve sales for FY 2027. But really, we're more focused on building the pre-sales for FY 2028 and FY 2029 at this point in time. The FY 2027 task is more about delivery, and we're confident with construction programs sitting at this point in time.
Excellent. Thanks, guys.
The next question comes from Murray Connellan with Moelis Australia. Please go ahead.
Morning, Nathan, Leon. I was hoping you could just give a bit more color on the Q4 2026 sales number, and I suppose, the activity into the first quarter of this year. The reason I ask is you've obviously, and this has been flagged quite a bit on this call, you've obviously got quite a lot of pre-sales baked in for 2027 and beyond. And the pre-sales number for Q4 drops quite a bit, but it's actually not too far away from, I suppose, your required replacement run rate. I imagine it's possible, given how much price growth we've seen, to secure more pre-sales if you're happy to be a bit more flexible on price or market a little bit more aggressively.
I was just curious to hear how much of this drop-off in Q4 is market related versus strategic, where you would rather play into the order book that you already have as opposed to, I suppose, dropping the price to meet the market. Just how you are thinking about all of that, please.
Yes. Look, it is difficult to say precisely, Murray, how much of the drop in query is due to one factor or another. The first thing I will say is that the demand is still there. The buyers are still cautious. That demand has not disappeared. Buyers are just digesting all of the different factors that are in play at the moment. The cumulative effect of all of that is a drop in sentiment and confidence. The first factor there is that we have less marketing. We engineered less sales and inquiry by marketing less. We had too much inquiry, and there was no need to spend that money generating that inquiry. Also, we had a gap in releases.
In Q2 and Q3, we advanced sales releases in order to capitalize on the strong conditions with an internal view that things were going to slow, as they eventually did. We brought forward some sales, if you like, from that Q4 into Q3. Do not be too frightened by the drop-off, the scale of that drop-off, because Q3 was a record number. You look left across the bar charts that we have provided in previous years, and in the sales chart. In fact, the sales numbers we have delivered in the context of sales over the last five to seven years are not that bad. It looks a little more severe than it is in reality.
We are comfortable for a period of slower sales, noting that we are sitting here in August of 2026, and we already have a great head start on FY 2028 pre-sales, and have plenty of time in which to secure the sales that we need for that year, depending, of course, how long these subdued conditions persist for. As I said in the main presentation, it is fair to assume some moderation of prices in some locations. I do not expect that to be severe because buyers are still anxious about the supply issue. A lot of buyers are in the money in the sense that they have purchased and are sitting on some capital growth. We think they are very keen to hold on to those sales.
Thanks, Nathan. Could I just ask, as a follow-up, how you are pricing the current, or I suppose more recent stages across Queensland and W.A. versus where they would have been previously?
As a general rule, price is consistent. In pockets, in fact, three projects in Victoria, we have increased our prices twice in the last few months. In a couple of projects in W.A., we have slightly moderated our prices.
Thanks. Just one more on the acquisition pipeline, please. Obviously, quite a bit of activity that's taken place in the last six months on that front, and starting to shore up new releases for 2023 and beyond. I'm just wondering what you're seeing from an on-market perspective as far as land is concerned. Is there much opportunity for acquisition through, I suppose, more distressed channels, or what are you seeing in terms of opportunities and, I suppose, what would you expect in terms of being able to land in terms of new land pockets in the next 12 months?
Firstly, we don't need to make acquisitions in order to achieve earnings growth in 2027 or 2028, possibly even 2029, subject to how things go. So we're in an incredibly strong position, and we like it that way. We're not in a position where we have to scurry to convert opportunities for near-term prop up. I'm happy with that. The medium-term outlook for the new housing sector is a very positive one, backed by the growing population and structural shortfall we have in housing. It's a good business to be in, and we want to do more of it. Consistent with strategy, we want to get out there and continue to replenish and grow our portfolio around the country. There are plenty of opportunities at any one point in time that we're seeing at the moment around the country. Some of those are distressed.
Most of them are not. We are having good success in securing acquisitions off-market, which is our preference. We converted a record number of sites in FY 2026 as a result of an accelerated acquisition strategy that we endorsed and put into place in FY 2025. We are focused on particularly master planned community sites, but also medium-density townhouse developments. You will see that a couple of the projects we have acquired in Victoria recently are infill sites that we can deliver townhouses on. The demand for those types of
products are very resilient, and we expect those projects to perform well. As indicated in the results material, we are working on a couple of other things, and we hope to be able to make some announcements in coming months about other acquisitions.
Thanks for the color, Nathan.
The next question comes from Gavin Allen with Euroz Hartleys. Please go ahead.
Morning, gents. Got up the queue eventually, so that's good. Just a really quick one for me, which you nearly answered already. You mentioned the inquiries slide, but I'm just curious. You are still selling what's available or at least what you wish to sell? Would that be a fair comment, albeit perhaps more slowly?
Yes. We've got stock in market, and we're still selling. We're holding back some releases. But, through particularly Q2, we'll see an increase in the number of stage releases around the country, particularly W.A.
Yeah. Got it. Just one last one. Just talking about Southbank . You talked about taking it to market. Just to be clear, despite them being a bit softer, the conditions there are sufficiently strong for you to take it to market is the current plan, would you say? If it's sold well, when would it look to complete, do you think?
Yes. We're gearing up for a launch of the project. There's some flexibility as to when that occurs. Ideally, we're doing that in a few months' time. But there's also a case to do that in early 2027 calendar year. We're working on that sooner timeframe as base case, and the expectation is that it settles in the final quarter of FY 2029, but it could be first quarter of FY 2030.
Yeah. Got it. Thanks, guys. Great numbers.
Thank you.
As a reminder, if you would like to ask a question, please press star then one to join the question queue. The next question comes from Michael Hallam with Team Invest. Please go ahead.
Oh, hi. Great results there. Congratulations. Just firstly, clarification of a question that was asked before. In W.A., you said that you've moderated the pricing. Do you mean reduced to touch or just moderated the growth in pricing?
Reduced to touch.
Reduced to touch. Yeah. Thank you. The question to ask at the time was, interest rates forecast to fall. Who are you relying on that information for? Who is forecasting those interest rates? That leads on to pre-sales of AUD 830 million, conditional versus unconditional sale mix in that.
Yes, I can take that. First question, interest rates. All four of the big four banks of their outlooks as rates have peaked and that they will fall in calendar year 2027, as well as numerous other economists and market predictors. In relation to pre-sales, about three-quarters of those pre-sales are unconditional, and the balance conditional. In saying that, we have good success of conversion of those conditionals into unconditional. We have a handle on how many will fall over, and we factor that into our guidance and our outlook.
Oh, okay. You are sort of, yeah, the profit on, next financial year allows for some fallovers there and some new contracts as well.
Yeah, very much.
Yeah. One more question, if I may. I was just wondering how availability of contractors, and trades and construction costs, how they are tracking at the moment.
There is a chronic shortfall of construction trades around the country, somewhere between 80,000 and 130,000. Thankfully, Cedar Woods has a deep portfolio in each of its locations and therefore strong relationships with the civil contractors and the builders. As a general rule, we can readily get built what we need to get built. There are pockets where it is harder than elsewhere. For example, Gold Coast, and apartment construction and WA apartment construction. So we have to work a little bit harder there to secure a builder and on reasonable terms. In terms of construction costs, there has been strong growth in costs in recent years. That growth has been materially outpaced by revenue growth and hence the margin expansion that we have had.
Our base case expectation is that costs continue to grow through FY 2027 and FY 2028, and it is possible that costs will grow more than prices in FY 2027 in some locations.
Great. Yeah. Thanks for that insight. Keep up the good work. Cheers.
Thank you.
There are no further phone questions at this time. I will now hand the call back to Nathan Blackburne for closing remarks.
Thank you everyone for listening in to our webcast. As I said, we are really pleased with the result, and have confidence in our ability to materially beat it in FY 2027. Thank you very much.
That does conclude our conference for today. Thank you for participating. You may now disconnect.