Cedar Woods Properties (ASX:CWP) reported a strong first half for FY2026, highlighted by record profitability, higher margins, and a lift in interim dividends, as management pointed to favorable housing market dynamics and a growing national development pipeline.
Record first-half profit and higher interim dividend
Managing Director Nathan Blackburne said the company was “really pleased” with the first-half outcome and its outlook for the full year. Cedar Woods delivered a record net profit after tax of AUD 39.6 million, which management said was 64% higher than the first half of FY2025.
The board declared an interim dividend of AUD 14, up 40% on the prior year, with the Bonus Share Plan to remain in operation for the interim dividend. CFO Leon Hanrahan also reiterated that the company views its dividend payout ratio on a full-year basis and said there was “no change” to its 50% payout ratio policy.
Sales, presales, and margins improve
Operationally, Cedar Woods reported contracted sales of 756 lots in the first half. As of 31 December, the company held presale contracts valued at over AUD 748 million, which management said was 16% higher than the AUD 642 million in presales at the same time last year. Management said these presales are expected to deliver revenue in the second half of FY2026 and beyond, adding that approximately half of the presales on hand would go into FY2027, with presales also “building” into FY2028.
Hanrahan said revenue growth and margin expansion drove a much stronger half-year performance. The company recorded 34% more settlements in the period, while gross margin increased to 31% from 26% a year earlier. Operating costs were lower, which management attributed to savings in marketing spend, while administration costs rose due to increased headcount and incentives as the company invests in new projects. Finance costs were lower than the prior period, which Hanrahan said reflected development stage and a higher portion of costs being capitalized.
Balance sheet and liquidity position
On the balance sheet, Hanrahan said total assets at 31 December were broadly in line with the June 30 position, with settlement-related inventory reductions offset by significant development spending during the half.
He reported net bank debt of AUD 85 million, down 40%, and said the company’s gearing metrics were low, with net bank debt to total tangible assets less cash at 10%. While this sat below the company’s target range, management expects gearing to rise in the second half due to fewer settlements and acquisition payments, finishing the year “in the high teens.”
Hanrahan also said Cedar Woods renewed its five-year corporate finance facilities shortly after the end of the half to secure long-term funding availability. The company ended the half with approximately AUD 170 million of drawn facility headroom, and management cited liquidity of over AUD 189 million as at 31 December 2025.
Market tailwinds and portfolio performance
Blackburne said the company continues to see “considerable tailwinds,” pointing to a “chronic shortfall of housing” and supply gaps. He cited expectations that housing completions will fall short of government targets by around 400,000 for the combined capitals by 2029, and argued that constrained supply should support sales volumes and pricing.
Demand indicators were described as strong. Management said inquiry levels rose through the first half, with Q2 inquiries 14% higher than Q1 and higher than the prior corresponding period. Sales momentum also accelerated, with record quarterly sales in Q2 FY2026, up 20% on Q1 and 17% year over year. The company described land sales as particularly strong, with steady sales in South Australia and improving sales in Victoria.
Blackburne said Cedar Woods achieved strong price growth in the first half in Western Australia and Queensland, and modest price growth in Victoria. He also said first-home buyers were among the most active buyer cohorts, supported by government incentives.
Partnerships, acquisitions, and outlook
Management emphasized diversification across product types and geographies, describing a pipeline of 36 projects and 9,000+ lots, townhouses, and apartments across four states. Blackburne said the company is developing approximately 1,100 dwellings and residential lots and highlighted the importance of multiple product types—including townhouses, master-planned communities, and commercial—to create a smoother earnings profile.
Cedar Woods also discussed its partnering strategy, including relationships with QIC and Tokyo Gas, which management said allow participation in larger projects without committing the entire capital. Blackburne said the company has had four projects with Tokyo Gas, with two completed, and that the intention with both partnerships is to pursue more projects.
On acquisitions, management said it is actively assessing opportunities in Victoria, Queensland, and Western Australia, with a bias toward medium-density projects and some apartment opportunities. During the half, Cedar Woods contracted a site in Aveley in Perth’s northwest suburbs, which management said is conditional due to planning and is expected to settle in FY2027. In the Q&A, management also discussed a townhouse project referenced as Soko (previously described as “Madeley” in pipeline charts), noting the land has settled and that it is expected to contribute predominantly to FY2027 and FY2028.
For previously announced acquisitions, management said payments for Corio, Mount Barker, and Fairfield are spread across multiple years, with installments discussed as occurring in 2026, 2027, and likely 2028.
Blackburne said the company is “well-placed for further growth in earnings,” citing favorable sector conditions and strong presale contracts supporting FY2026 and FY2027. Management stated it had guided previously to a minimum of 20% earnings growth for FY2026 and said it now expects approximately 30%–35% growth. In response to questions, management attributed the guidance upgrade to a combination of stronger price growth across projects, more settlements coming into the year, and reduced marketing costs due to strong inquiry levels.
Management also noted seasonality in settlement timing, saying FY2026 was weighted to the first half, with slightly fewer settlements expected in the second half and a “very big” first quarter anticipated in FY2027.
About Cedar Woods Properties (ASX:CWP)
Cedar Woods Properties Limited engages in property investment and development activities in Australia. It is involved in the acquisition, development, marketing, and sale of housing lots, apartments, townhouses, and commercial properties in Western Australia, South Australia, Victoria, and Queensland. The company was incorporated in 1987 and is based in West Perth, Australia.
