CDI FY2023 Results Announcement

**DIRECTORS' REVIEW** Financial Performance CDL Investments New Zealand Limited ("CDI") recorded a profit after tax of $13.5 million for 2023 (2022: $31.2 million) which reflects the challenging trading environment seen over the past twelve months. While the Board is disappointed that the level of profit is significantly less than previous years, it is appreciative of the work put in by Management to achieve the results in 2023. The Board believes that CDI has established a platform for future revenue growth, particularly from the company's newer residential developments. Profit before tax for 2023 was commensurate with the company's performance and was $18.7 million (2022: $43.3 million). Property sales, rental income & other income totalled $31.2 million (2022: $67.3 million). There were no one-off gains from land sales in 2023 as compared to $29 million recognised in the previous year. At year end, CDI's shareholders' funds increased to $313.7 million (2022: $308.9 million) and total assets also increased to $319.2 million (2022: $313.7 million). Net tangible assets per share (at book value) also increased to 107.9 cents (2022: 107.0 cents). CDI's property holdings as at 31 December 2023 as independently valued was $412.6 million (2022: $405.4 million). This takes into account new acquisitions made in 2023 as well as the sales recorded. At cost, the portfolio was valued at $260.4 million (2022: $239.5 million) in line with CDI's accounting policies. Property Portfolio In 2023, we purchased and settled a total of 37.5 hectares of land. Our acquisitions were in the Waikato, Nelson / Marlborough and Canterbury regions with the majority being new projects, not adjacent to existing land holdings. Management is working on development schemes and resource consent applications for these new acquisitions to allow development work to commence in the near term. Post balance date, the purchase of 10.8 hectares of land in Nelson was settled during January 2024. Residential sales in 2023 were strongest at Prestons Park (Christchurch) with a small number of sales coming from the Auckland subdivisions (Kewa Road & Christian / Tram Valley Road), which are now sold out. Solid progress has been made at our Iona Block development in Havelock North where we have secured resource consents for Stage 1 and commenced construction. We are confident that works will progress to a stage where off-the-plan sales can start in Q2 2024. The Stage 2 resource consent has been lodged and is currently being processed by Hastings District and Hawkes Bay Regional Councils. CDI's commercial projects including the warehouses in Wiri, South Auckland and the neighbourhood centres located at Prestons Park and Stonebrook are performing as expected and contributed $2.5 million, representing approximately 8% of total revenue in 2023. The high inflationary environment during 2023 impacted lease conversion rates with a number of tenants unable to secure sufficient finance to proceed. Dividend Announcement The Board resolved to maintain its fully imputed ordinary dividend at 3.5cents per share payable on 17 May 2024. The Board carefully considered the dividend amount and decided to provide a consistent return to shareholders. This is a sign of the confidence the Board has in the company's future prospects. The level of dividend will allow the company to retain enough cash resources to allow completion of its development work during this year. The record date will be 3 May 2024. The Dividend Reinvestment Plan will apply to this dividend. Summary and Outlook The dramatic downward market shifts we encountered from the end of 2022 (which carried into 2023) should not continue into 2024. With a new government promising reform of convoluted consent processes and the prospect of some additional fast-tracking, we feel that residential property development as a whole should stabilise during 2024 and start to tick upward through 2025, if not earlier. Market conditions are presenting some interesting opportunities which the Board has asked Management to assess and consider carefully. We are encouraging Management to broaden their horizons and look at property types and potential acquisitions in the residential and commercial spheres which they may not have considered previously. For those reasons, the Board and Management currently expect CDI's revenues and profits in 2024 to be better than those in 2023. Further updates will be provided as the year progresses. The Board and Management share an optimistic outlook for 2024, particularly if sales from Havelock North commence before the end of the year. We will be doing everything practicable to keep to our development timelines so our sales targets can be met. I would like to offer my thanks to our loyal shareholders on behalf of the Board for your invaluable support during 2023. Colin Sim Chairman 26 February 2024 **MEDIA RELEASE** CDL INVESTMENTS OPTIMISTIC ABOUT 2024 DESPITE REDUCED PROFIT FOR 2023 NZX-listed residential property developer CDL Investments New Zealand Limited (NZX: CDI) reported its results for the year ended 31 December 2023 earlier today. "Given the very difficult market conditions we have had to endure in 2023, with no one-off gains as occurred in 2022, our 2023 results were lower than in the previous year. That being said, the Board is satisfied with the level of sales and profit that was achieved", said CDI's Chairman and Independent Director Colin Sim. CDI's Managing Director Jason Adams echoed Mr. Sim's comments and also noted that the company had made acquisitions over the last year which might not have been available in times of better market conditions. "We managed to keep our core business intact during difficult times and reduced our activity where the markets were not responding. We have been able to take advantage of the weak market conditions to bolster our land portfolio to grow our future sales pipeline", he said. CDI's 2023 acquisitions totaled 37.5 hectares of land in the Waikato, Nelson / Marlborough and Canterbury regions with the majority being new projects not adjacent to existing holdings. "This gives us the chance to start new projects with new designs which will create new sales opportunities for us", said Mr. Adams. "These are smaller projects targeted for development, completion and sale within the short-term", he said. Despite the fall in profit, CDI maintained its dividend at 3.5 cents per share which is payable on 17 May 2024 with a record date of 3 May 2024. "The Board wanted shareholders to receive a consistent level of returns from CDI. Shareholders should be assured that the Board has continued confidence in the company going forward. The level of dividend will ensure that we still retain enough cash to do what we need to do this year", said Mr. Sim. Mr. Sim said that the Board was optimistic about 2024. "So far, our development work and consent applications are proceeding as planned and provided that we are able to keep to our timelines, we should see off-the-plan sales from new projects such as the Iona Block in Havelock North commence from Q2 2024. That should translate into increased revenue and profit during this year", he said. Summary of results: o Profit after tax = $13.5 million (2022: $31.2 million) o Profit before tax = $18.7 million (2022: $43.3 million) o Property sales & other income = $31.2 million (2022: $67.3 million) o Shareholders' funds = $313.7 million (2022: $308.9 million) o Total assets = $319.2 million (2022: $313.7 million) o Net tangible asset value (at book value) = 107.9 cents per share (2022: 107.0cps) o Earnings per share = 4.64 cents per share (2022: 10.82cps) About CDL Investments New Zealand Limited: CDL Investments New Zealand Limited (NZX:CDI) has a proud track record of acquiring and developing residential sections in New Zealand for over two decades. With a focus on creating and developing a range of high-quality residential sections to New Zealanders, CDI has successfully completed numerous subdivision projects in Auckland, Hamilton, Tauranga, Hastings, Havelock North, Taupo, Nelson, Christchurch, Rolleston (Canterbury) and Queenstown. More recently, CDI has successfully completed commercial property projects including industrial warehouses in Wiri, South Auckland and neighbourhood centres at Prestons Park, Christchurch and Stonebrook in Rolleston. CDI is a majority-owned subsidiary of NZX-listed Millennium & Copthorne Hotels New Zealand Limited. ENDS Issued by CDL Investments New Zealand Limited Enquiries to: Jason Adams, Managing Director 027 683 7220 End CA:00426800 For:CDI Type:FLLYR Time:2024-02-26 09:03:49