CDI: 2018 Full Year Results

DIRECTORS’ REVIEW

Financial Performance

CDL Investments New Zealand Limited (“CDI”) recorded a profit after tax of $33.6 million for the year ended
31 December 2018, an increase of 4.6% from the previous year (2017: $32.2 million). This result is the
ninth consecutive year of profit growth for the company.

Property sales & other income totaled $85.0 million (2017: $78.7 million). Profit before tax also increased
to $46.7 million (2017: $44.7 million). Shareholders’ funds as at 31 December 2018 increased to $210.6
million (2017: $186.1 million) and the Company’s total assets stood at $217.6 million (2017: $191.7
million). The net tangible asset per share (at book value) at balance date was 75.7 cents (2017: 67.1
cents).

Dividend Announcement

Reflecting the result, CDI has resolved to maintain its fully imputed ordinary dividend at 3.5 cents per share
payable on 17 May 2019. The record date will be 3 May 2019. The Dividend Reinvestment Plan will apply
to this dividend.

Land portfolio

At 31 December 2018, the independent market value of CDI’s land holdings was $337.8 million (2017:
$276.3 million). At cost, the portfolio was valued at $169.7 million (2017:$124.7 million) in line with CDI’s
accounting policies. This reflects both the sales made during the year as well as acquisitions of 86.4
hectares of land in 2018 in Hamilton and Christchurch.

Good progress is being made on the commercial areas which are part of our Prestons Park and
Stonebrook subdivisions and we anticipate that these should be ready for occupation in the first half of
2020.

Summary and Outlook

With our recent land acquisitions, the Board is confident that the future of the company and its core business
is secure. The Board is also satisfied that the changes to the Overseas Investment Act introduced in 2018
merely adds additional procedural steps and will not materially affect the Company’s acquisitions of land
already zoned residential. The Board is therefore confident in CDI’s business model of developing
residential sections in growth areas.

While we are confident that 2019 will be profitable, we are already seeing a slowing property market and
this sentiment will impact our sections sales in coming months. 2019 will therefore necessitate some
degree of flexibility in our sales approaches in order to maintain our positive sales tempo.

Management and staff

On behalf of the Board, I thank our management and staff for their work in 2018.

I would like to take this opportunity to acknowledge two members of the CDI family who we lost in the
course of 2018. Long-standing former Independent Director Rob Challinor passed away after a long illness
in October and our highly respected former Executive Director John Lindsay passed away after a short
illness in November. The Board sent its condolences to both families and will mark their respective
contributions to CDI at an appropriate time in the future.


Colin Sim
Chairman
13 February 2019

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PROFIT GROWTH FOR CDL INVESTMENTS NEW ZEALAND

Property development company CDL Investments New Zealand Limited (NZX: CDI) today reported an
increased profit after tax as part of its results for the year ended 31 December 2018.

CDI increased its profit after tax by 4.6% to $33.6 million with property sales & other income increasing by
8.1% to $85.0 million over 2017.

“It’s pleasing to report a ninth consecutive year of profit growth”, said managing director Mr. B K Chiu.
“Market conditions, especially in the last half of 2018, started changing with the number of sales slowing
noticeably and this is something we expect will continue into much of 2019”, he added.

CDI also reported that it had acquired over 86 hectares of land in the past year in Hamilton and Christchurch
for future development.

“These acquisitions were made at strategic locations. It was important to have a pipeline to continue our
core activity of residential land development for sustainable growth across a geographical spread where
the company has built its experience on”, said Mr. Chiu.

He also noted that the recent changes to the Overseas Investment Act added additional procedural steps
for the acquisition of land already zoned residential. The new regulations would not materially affect CDI’s
business model of residential development.

CDI’s Board resolved to maintain its dividend at 3.5 cents per share fully imputed which would be paid to
shareholders on 17 May 2019. The Record Date would be 3 May 2019 and the Dividend Reinvestment
Plan will apply to this dividend.

Speaking to the outlook for 2019, Mr. Chiu noted that the company would need to adopt a flexible sales
plan as well as timing the development and release of sections appropriately. “The diversification of land
into commercial development adjacent to our Prestons Park (Christchurch) and Stonebrook (Rolleston)
subdivisions will add a recurring income stream for the company in 2020. At the same time CDI’s strong
balance sheet allows the company to capitalise on land acquisition opportunities in an environment where
housing supply still lags behind demand”, he said.

Summary of results:

• Profit after tax $33.6 million (2017: $32.2 million)
• Profit before tax $46.7 million (2017: $44.7 million)
• Total revenue & other income $85.0 million (2017: $78.7 million)
• Shareholders’ funds $210.6 million (2017: $186.1 million)
• Total assets $217.6 million (2017: $191.7 million)
• Net tangible asset value (at book value) 75.7 cents per share (2017: 67.1cps)
• Earnings per share 12.10 cents per share (2017: 11.60cps)


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. 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:
B K Chiu, Managing Director
(09) 353 5058

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Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)

Results for announcement to the market
Name of issuer CDL Investments New Zealand Limited
Reporting Period 12 months to 31 December 2018
Previous Reporting Period 12 months to 31 December 2017

Amount (000s) Percentage change
Revenue from ordinary
activities
$85,030 Up 8.09%
Profit (loss) from ordinary
activities after tax attributable
to security holder
$33,641 Up 4.60%
Net profit (loss) attributable
to security holders
$33,641 Up 4.60%
Interim/Final Dividend
Amount per Quoted Equity
Security
$0.035
Imputed amount per sec
Quoted Equity Security
$0.013611
Record Date 03/05/2019
Dividend Payment Date 17/05/2019
Net tangible assets per
Quoted Equity Security
$0.76 Up 12.91%
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to the Directors’ Review accompanying this release.
Authority for this announcement
Name of person

authorised
to make this announcement
Takeshi Ito – Company Secretary
Contact phone number 09 353 5005
Contact email address takeshi.ito@cdli.co.nz
Date of release through MAP

13/02/2019

Audited financial statements accompany this announcement.

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Corporate Action Notice
(for a Distribution)

Page
1 of 2

1

If the distribution is imputed, then the total amount of the distribution is the cash distribution plus the imputation credits. The
imputation credits plus the RWT amount must be 33% of the gross distribution. If the distribution is fully imputed the imputation
credits will be 28% of the gross distribution with remaining 5% being RWT. You may delete this footnote when you release this form
to market

Section 1: issuer information
Name of issuer CDL Investments New Zealand Limited
Financial product name/description Ordinary Shares
NZX ticker code CDI
ISIN (If unknown, check on NZX
website)
NZKGLE0001S8

Type of distribution
(Please mark with an X in the relevant
box/es)
Full Year X Quarterly
Half Year Special
DRP applies Yes
Record date Close of trading on: 03/05/2019
Ex-Date (one business day before the
Record Date)
02/05/2019
Payment date (and allotment date for
DRP)
17/05/2019
Total monies associated with the
distribution
$9,734,147.05

Source of distribution (for example,
retained earnings)
Retained earnings
Section 2: distribution amounts
Total amount
1
$0.048611
Cash per financial product $0.035
Supplementary distribution $0.006176
Section 3:
Is the distribution imputed Fully imputed
Partial imputation
No imputation
If fully or partially imputed, please state
imputation rate as % applied
28%
Imputation tax credits per financial
product
$0.013611

Page 2 of 2


Resident withhold tax amount per
financial product
$0.002431
Section 4: distribution re-investment plan (applicable)
DRP % discount (if any) Nil
Start date and end date for determining
market price for DRP
06/05/2019 10/05/2019
Date strike price to be announced (if not
available at this time)
13/05/2019
Specify source of financial products to
be issued under DRP programme (new
issue or to be bought on market)
New issue of ordinary shares
DRP strike price per financial product To be announced
Last date to submit a participation
notice for this distribution in accordance
with DRP participation terms
03/05/2019
Section 5: authority for this announcement
Name of person authorised to make this
announcement
Takeshi Ito – Company Secretary
Contact phone number +64 9 353 5005
Contact email address takeshi.ito@cdli.co.nz
Date of release via MAP 13/02/2019

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18

Independent Auditor’s Report
To the shareholders of CDL Investments New Zealand Limited
Report on the consolidated financial statements
Opinion
In our opinion, the accompanying consolidated
financial statements of CDL Investments New
Zealand Limited (the company) and its subsidiaries
(the group) on pages 1 to 17:
i. present fairly in all material respects the Group’s
financial position as at 31 December 2018 and
its financial performance and cash flows for the
year ended on that date; and
ii. comply with New Zealand Equivalents to
International Financial Reporting Standards and
International Financial Reporting Standards.
We have audited the accompanying consolidated
financial statements which comprise:
— the consolidated statement of financial position
as at 31 December 2018;
— the consolidated statements of comprehensive
income, changes in equity and cash flows for
the year then ended; and
— notes, including a summary of significant
accounting policies and other explanatory
information.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the group in accordance with Professional and Ethical Standard 1 (Revised) Code of
Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board and the
International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the
IESBA Code.
Our responsibilities under ISAs (NZ) are further described in the auditor’s responsibilities for the audit of the
consolidated financial statements section of our report.
Our firm has also provided other services to the group in relation to taxation compliance, taxation advisory and
scrutineering at the group’s annual meeting of shareholders. Subject to certain restrictions, partners and
employees of our firm may also deal with the group on normal terms within the ordinary course of trading
activities of the business of the group. These matters have not impaired our independence as auditor of the
group. The firm has no other relationship with, or interest in, the group.
Materiality
The scope of our audit was influenced by our application of materiality. Materiality helped us to determine the
nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually
and on the consolidated financial statements as a whole. The materiality for the consolidated financial
statements as a whole was set at $2.3 million determined with reference to a benchmark of group profit before
tax. We chose the benchmark because, in our view, this is a key measure of the group’s performance.

19

Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the consolidated financial statements in the current period. We summarise below those matters and our key
audit procedures to address those matters in order that the shareholders as a body may better understand the
process by which we arrived at our audit opinion. Our procedures were undertaken in the context of and solely
for the purpose of our statutory audit opinion on the consolidated financial statements as a whole and we do not
express discrete opinions on separate elements of the consolidated financial statements
The key audit matter How the matter was addressed in our audit
Capitalisation and Allocation of Development Costs
Refer to note 8 of the consolidated
financial statements.
The group’s development property
comprises land and costs incurred to
develop land into subdivisions and
individual properties for sale. At 31
December 2018 development
properties amounted to $169.7
million representing 80.6% of net
assets in the consolidated statement
of financial position.
Determining whether to capitalise or
expense costs relating to
development of the land is
subjective as it depends whether the
costs enhance the land or maintain
the current value. In addition there is
significant judgement in determining
how to allocate the costs to
individual properties.
To assess the capitalisation of development costs we examined the
operating effectiveness of the Group’s process to capitalise and record
development costs. We then obtained invoices for a sample of
capitalised costs to check whether the nature of the expense met the
capitalisation criteria in the accounting standards. We found no
exceptions.
Our procedures over the allocation of these development costs
involved considering the costs capitalised to properties sold versus
costs capitalised to the remaining properties in the portfolio, and in
comparison to realised value upon sale. We also checked for
consistency in approach between periods. The evidence we obtained
demonstrated the allocation of costs was in line with our expectations.


Other information
The Directors, on behalf of the group, are responsible for the other information included in the entity’s Annual
Report. Other information includes the Director’s review, disclosures relating to corporate governance, the trend
statement and financial summary and the other information included in the Annual Report. Our opinion on the
consolidated financial statements does not cover any other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial statements our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have received the Director’s Review and have nothing
to report in this regard. The Annual Report is expected to be made available to us after the date of this Independent
Auditors Report and we will report the matters identified, if any, to those charged with governance.