Cedar Woods Properties Ltd (ASX: CWP)
View on CWP for long term as it is on a 5% yield and Forecast to grow eaarning and revenue by 10%
The Latest Q&A
Answer
Hi Arthur,
For subscribers not familiar with this $580mn business it buys or secures land, adds value through planning and development, and then sells the finished lots or properties, with residential land remaining its largest product category.
Hence by definition CWP is exposed to a cyclical macro environment with lower interest rates, strong employment and rising house prices generally supporting demand and development activity, while higher rates and weaker housing demand can pressure sales volumes and margins.
- Unfortunately, at the moment the stars aren’t aligning for CWP with declining property prices and turnover dominating the press of late.
Hence the share price of CWP has fallen ~17% from its high two weeks ago with investors happy to sell strength following its strong FY26 result, although the companies understandably cautious FY27 guidance flagging softer residential sales conditions and ongoing construction cost pressures hasn’t helped.
- CWP reported a record FY26 NPAT of $65.6M (+36%), revenue of $502.4M (+8%), EPS of 77.9c (+33%), and a final dividend of AUD 0.25/share.
Pre-sales also hit a record $830M, with ~65% expected to settle in FY27. However, on the earnings call, management noted that construction conditions remain challenging — a significant shortage of tradespeople and limited contractor capacity, particularly for apartments.
- Costs are expected to continue growing through FY27 and FY28, potentially outpacing prices in some locations.
CWP is an excellent proxy for a turn in the property market, but we are reticent to consider the stock at this stage of the cycle.
