Shares in Cedar Woods Properties Ltd (ASX: CWP) were trading almost 10% higher on Wednesday after the company announced its second profit outlook upgrade so far this financial year.
The property development company in October upgraded the guidance for its FY26 profits to be 15% better than last year’s net profit, up from the previous guidance of 10%.
The company has now upgraded this once again, and says FY26 full-year profit is likely to come in “at least” 20% higher than the full-year result for FY25, which was a net profit of $48.1 million, itself up 18.9% on the previous year.
Tailwinds for the business
The company said on Wednesday that its second upgrade of the year was due to “strong sales and price growth, as well as faster project delivery which is occurring at some projects”.
The company said this stronger result would also likely flow into more dividend payments to investors; however, it did not specify a potential dividend increase.
As the company said:
A record FY26 profit is expected for the company, which will in turn support increased dividend distributions. Earnings will be weighted to the first half.
The company said overall the business was travelling well, with growth targets being hit early.
Full year sales price growth expectations have been achieved in the first half of the year at many of the company’s projects, especially in Western Australia and Queensland which continue to experience very favourable conditions. South Australia’s conditions are steady, and Victoria is experiencing improved enquiry and sales levels. Overall, enquiry and sales volumes are at historically elevated levels for the company.
The company said there were structural tailwinds for its business, including housing supply shortfalls, low unemployment, and government support for homebuyers.
Cedar Woods added that recent speculation that interest rates might soon be heading higher did not seem to be deterring buyers, “with the national housing supply shortfall expected to continue to support sales volumes and pricing”.
The company added that it had a strong balance sheet, a diversified and high-quality development pipeline, significant presales, and “the board remains confident in the company’s ability to continue to deliver strong returns for shareholders”.
Cedar Woods said more detail on its outlook would be provided when it reported its half-year results on February 24.
Cedar Woods shares were 9.3% higher at $8.74 in early trade on Wednesday. The company was valued at $680.6 million at the close of trade on Tuesday.
The post Which property group has just upgraded its profit outlook for the second time this year? appeared first on The Motley Fool Australia.
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