CDI: 2019 Interim Results Announcement

DIRECTORS’ REVIEW


Financial Performance:

CDL Investments New Zealand Limited (“CDI”) advises that the Company has made an unaudited
operating profit after tax of $15.10 million for the six month period ending 30 June 2019 (2018: $25.47
million). Operating profit before tax was $20.98 million (2018: $35.38 million).

Property sales and other income for the period was $40.29 million (2018: $60.23 million). Net Asset
Backing (at cost) for the period under review was 77.6 cents per share (2018: 72.8 cents per share).

Portfolio update:

Compared to the same period last year when sales of its Auckland (Greville Road) and Hamilton
(Magellan Heights) subdivisions contributed to its strong first half results, it is clear that market
conditions for residential sections have softened and this is clearly reflected in these results. Despite
these challenging conditions, CDI was able to adjust its sales programme and recorded good sales at its
Hastings and Christchurch subdivisions in the first half of the year.

CDI has also taken advantage of the current market to purchase an additional 8.17 hectares of land in
the Hawkes Bay region for development in the medium term. Agreements for an additional 25.77
hectares are due to settle before the end of the year subject to fulfilment of conditions.

CDI is also progressing well with its commercial developments at Stonebrook (Rolleston) and Prestons
Park (Christchurch) and remains on target for completion and occupancy by Q3 2020.

Commentary and Outlook:

The results reflect the current market conditions and both the Board and Management are conscious
that these challenging conditions will continue for the remainder of 2019.

That said, we are optimistic about improving our sales volume in the third and fourth quarters of this
year. CDI has a good inventory of sections for sale across our developments and we are therefore
optimising our sales programme in the areas where demand is the highest in order to maximise our
revenue.

In addition, a soft market can present the company with opportunities to grow our land portfolio. We
are therefore actively looking to acquire land in key locations which will add value to our current and
future development programmes together with other development opportunities.

Our focus remains on the delivering the best possible result for 2019 to our shareholders. The Board is
confident that we will deliver a stronger sales performance in the second half of 2019 and that this will
be reflected in the year-end results.


Colin Sim
Chairman
1 August 2019

---

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 6 months to 30 June 2019
Previous Reporting Period 6 months to 30 June 2018
Currency NZD

Amount (000s) Percentage change
Revenue from continuing
operations
$40,291 Down 33.10%
Total Revenue $40,291 Down 33.10%
Net profit/(loss) from
continuing operations
$15,102 Down 40.71%
Total net profit/(loss) $15,102 Down 40.71%
Interim Dividend
Amount per Quoted Equity
Security
No Interim has been declared
Imputed amount per Quoted
Equity Security
Not applicable
Record Date
Not applicable
Dividend Payment Date
Not applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.78 $0.73
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Refer to Directors’ Review and Media Release accompanying
this release
Authority for this announcement
Name of person

authorised
to make this announcement
Takeshi Ito – Company Secretary
Contact person for this
announcement
Takeshi Ito – Company Secretary
Contact phone number +64 9 353 5005
Contact email address takeshi.ito@cdli.co.nz
Date of release through MAP

1 August 2019

Unaudited condensed interim financial statements accompany this announcement.

---

1 August 2019

CDL INVESTMENTS REMAINING POSITIVE ABOUT 2019
IN SPITE OF CHALLENGING TRADING CONDITIONS

NZX-listed property development and investment company CDL Investments New Zealand Limited
(NZX:CDI) today released its (unaudited) results for the six months to 30 June 2019 and reported an
operating profit of $15.10 million (2018: $25.47 million) on revenue of $40.29 million (2018: $60.23
million).

“The results reflect a challenging market. Last year we had the benefit of high-margin sales at our
Auckland and Hamilton developments which we did not have this year. But we remain positive and we
have recorded good sales from our Hastings and Christchurch subdivisions to date”, said CDI’s
Managing Director Mr. BK Chiu.

Mr. Chiu also noted that the current market conditions presented CDI with opportunities.

“Like last year, we have identified and purchased an additional 8.17 hectares of land this year with
agreements on 25.77 hectares to settle later this year. These will add value to our current and future
projects”, he said.

He confirmed that CDI’s commercial developments at Stonebrook (Rolleston) and Prestons Park
(Christchurch) remained on target for completion and occupancy by Q3 2020.

Speaking about the outlook for the rest of 2019, Mr. Chiu said that CDI was focused on optimising sales
to deliver the best possible result to shareholders.

“We are confident that our second half performance will be better than the first. We have a strong
inventory of sections for sale and we will target those areas where we believe we will achieve the most
sales. All of that will be shown in our year-end results”, he said.

ENDS


Issued by CDL Investments New Zealand Limited

Any inquiries please contact:
B K Chiu
Managing Director
CDL Investments New Zealand Ltd
(09) 353 5077

---

CDL Investments New Zealand Limited and its Subsidiary
Condensed Interim Statement of Comprehensive Income
For the half year ended 30 June 2019
Unaudited 6
Months to
Unaudited 6
Months to
In thousands of dollarsNote30/06/1930/06/18
Revenue40,181 60,192
Cost of sales(17,725) (23,090)
Gross profit22,456 37,102
Other income110 35
Administrative expenses(134) (140)
Property expenses(171) (185)
Selling expenses(1,099) (1,514)
Other expenses(709) (646)
Results from operating activities20,453 34,652
Finance income524 726
Finance costs9(2) -
Net finance income522 726
Profit before income tax20,975 35,378
Income tax expense(5,873) (9,908)
Profit/(loss) for the period15,102 25,470
Total comprehensive income/(expense) for the period15,102 25,470
Profit/(loss) Attributable to:
Equity holders of the Parent15,102 25,470
Total comprehensive income/(expense) for the period15,102 25,470
Earnings per share
Basic earnings per share (cents)35.42c9.16c
Diluted earnings per share (cents)35.42c9.16c
The accompanying notes form part of, and should be read in conjunction with these financial statements.
Page 1

CDL Investments New Zealand Limited and its SubsidiaryCondensed Interim Statement of Changes in Equity
For the half year ended 30 June 2019
GROUP
In thousands of dollars
Note
Unaudited Share
Capital
Unaudited
Retained
Earnings
Unaudited Total
Equity
Balance at 1 January 2018
54,310

131,802

186,112

Total comprehensive income/(expense) for the periodProfit/(loss) for the period
-

25,470

25,470

Total comprehensive income/(expense) for the period
-

25,470

25,470

Shares issued under dividend reinvestment plan
2
554

-

554

Dividend to shareholders
2
-

(9,713)

(9,713)

Supplementary dividend
-

(308)

(308)

Foreign investment tax credits
-

308

308

Balance at 30 June 2018
54,864

147,559

202,423

Balance at 1 January 2019
54,864

155,730

210,594

Total comprehensive income/(expense) for the periodProfit/(loss) for the period
-

15,102

15,102

Total comprehensive income/(expense) for the period
-

15,102

15,102

Shares issued under dividend reinvestment plan
2
510

-

510

Dividend to shareholders
2
-

(9,734)

(9,734)

Supplementary dividend
-

(309)

(309)

Foreign investment tax credits
-

309

309

Balance at 30 June 2019
55,374

161,098

216,472

Page 2

CDL Investments New Zealand Limited and its Subsidiary
Condensed Interim Statement of Financial Position
As at 30 June 2019
Unaudited as at
Audited as
at
Unaudited as
at
In thousands of dollarsNote30/06/1931/12/1830/06/18
SHAREHOLDERS' EQUITY
Issued capital55,374 54,864 54,864
Retained earnings161,098 155,730 147,559
Total Equity216,472 210,594 202,423
Represented by:
NON CURRENT ASSETS
Plant, furniture and equipment936 4 5
Development property138,119 124,652 121,302
Investment in associate2 2 2
Total Non Current Assets138,157 124,658 121,309
CURRENT ASSETS
Cash and cash equivalents16,594 7,280 25,814
Short term deposits21,120 38,620 31,000
Trade and other receivables3,314 1,984 3,276
Development property41,377 45,072 29,229
Total Current Assets82,405 92,956 89,319
Total Assets220,562 217,614 210,628
NON CURRENT LIABILITIES
Deferred tax liabilities71 71 2
Lease liabilities917 - -
Total Non Current Liabilities88 71 2
CURRENT LIABILITIES
Trade and other payables2,888 2,175 2,730
Employee entitlements37 32 36
Income tax payable1,064 4,742 5,437
Lease liabilities913 - -
Total Current Liabilities4,002 6,949 8,203
Total Liabilities4,090 7,020 8,205
Net Assets216,472 210,594 202,423
The accompanying notes form part of, and should be read in conjunction with these financial statements.
Page 3

CDL Investments New Zealand Limited and its Subsidiary
Condensed Interim Statement of Cash Flows
For the half year ended 30 June 2019
Unaudited 6 Months to
In thousands of dollarsNote30/06/1930/06/18
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from:
Receipts from customers38,731 58,510
Interest received754 893
Cash was applied to:
Payments to suppliers(20,990) (14,164)
Payments to employees(272) (283)
Purchase of development properties(7,624) (36,354)
Income tax paid(9,242) (7,595)
Net Cash Inflow from Operating Activities1,357 1,007
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from:
Short Term Deposit Maturities38,620 46,500
Cash was applied to:
Short term deposits(21,120) (31,000)
Purchase of plant, equipment and furniture(2) -
Principal repayment of lease liability9(8) -
Net Cash Inflow From Investing Activities17,490 15,500
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided from:
Reinvestment of Dividends into Shares Issued
Cash was applied to:
Dividend paid(9,224) (9,159)
Supplementary dividend paid(309) (308)
Net Cash Outflow from Financing Activities(9,533) (9,467)
Net Increase in Cash and Cash Equivalents9,314 7,040
Add Opening Cash and Cash Equivalents7,280 18,774
Closing Cash and Cash Equivalents16,594 25,814
Page 4

CDL Investments New Zealand Limited and its Subsidiary
Condensed Interim Statement of Cash Flows - continued
For the half year ended 30 June 2019
Unaudited 6 Months to
In thousands of dollarsNote30/06/1930/06/18
RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Net profit after taxation15,102 25,470
Adjusted for non cash items:
Depreciation6 -
Amortisation of right-of-use assets 92 -
Income tax expense5,873 9,908
Movement in deferred taxation
Adjustments for movements in working capital:
Increase in receivables(1,330) (1,550)
Increase in development properties(9,772) (25,832)
Increase in payables718 606
Cash generated from Operations10,599 8,602
Income tax paid(9,242) (7,595)
Cash Inflows from Operating Activities1,357 1,007
The accompanying notes form part of, and should be read in conjunction with these financial
statements.
Page 5

Page 6
CDL Investments New Zealand Limited and its
CDL Investments New Zealand Limited and its CDL Investments New Zealand Limited and its
CDL Investments New Zealand Limited and its Subsidiary
SubsidiarySubsidiary
Subsidiary


Notes to the Condensed Interim Financial Statements
For the half year ended 30 June 2019 (unaudited)

1.
1.1.
1.

Significant Accounting Policies
Significant Accounting PoliciesSignificant Accounting Policies
Significant Accounting Policies





Reporting Entity
Reporting EntityReporting Entity
Reporting Entity


CDL Investments New Zealand Limited (the “Company”) is a company domiciled in New Zealand, registered under
the Companies Act 1993 and listed on the New Zealand Stock Exchange. The Company is a FMC Reporting Entity in
terms of the Financial Markets Conduct Act 2013 and the Financial Reporting Act 2013.

The condensed interim financial statements of the Company as at and for the half year ended 30 June 2019
comprises the Company and its subsidiary (together referred to as the “Group”).

The principal activity of the Group is the development and sale of residential land properties.



(a)
(a)(a)
(a) Statement of compliance
Statement of complianceStatement of compliance
Statement of compliance


The condensed interim financial statements have been prepared in accordance with New Zealand Generally
Accepted Accounting Practice (“NZ GAAP”). They comply with NZ IAS 34
Interim Financial Reporting. The
condensed interim financial statements do not include all of the information required for full annual financial
statements.

The accounting policies applied by the Group in these condensed financial statements are the same as those
applied by the Group in its consolidated financial statements for the year ended 31 December 2018 except for
the adoption of one new standard (see Note 9).

The condensed interim financial statements were authorised for issuance on 1 August 2019.



2.
2.2.
2.

Capital & Reserves
Capital & ReservesCapital & Reserves
Capital & Reserves



Share
ShareShare
Share

Capital
CapitalCapital
Capital


Under the Company’s Dividend Reinvestment Plan, an additional 687,093 shares were issued on 17 May 2019
(2018: 604,516) at a strike price of $0.7422 (2018: $0.9154).

At 30 June 2019, the authorised share capital consisted of 278,805,580 fully paid ordinary shares (2018:
278,118,487).



Dividends
DividendsDividends
Dividends
The following dividends were declared and paid during the period ending 30 June:
In thousands of dollars

201
201201
2019
99
9

201
201201
2018
88
8


3.5 cents per qualifying ordinary share (2018: 3.5 cents) 9,734 9,713
9,734
9,7349,734
9,734

9,713
9,7139,713
9,713





3
33
3.
..
.

E
EE
Earnings Per Share
arnings Per Sharearnings Per Share
arnings Per Share



The calculation of basic and diluted earnings per share at 30 June 2019 of 5.42 cents (2018: 9.16 cents) was based
on the profit attributable to ordinary shareholders of $15,102,000 (2018: $25,470,000); and weighted average number
of shares of 278,576,549 (2018: 277,916,982) on issue in the period.



4
44
4.
..
.

Segment
SegmentSegment
Segment

Reporting
ReportingReporting
Reporting





Operating segments
Operating segmentsOperating segments
Operating segments


The single operating segment of the Group consists of property operations, comprising the development and sale of
residential land sections.

The Group has determined that its chief operating decision maker is the Board of Directors on the basis that it is this
group which determines the allocation of resources to segments and assesses their performance.

Geographical segments
Geographical segmentsGeographical segments
Geographical segments


Segment revenue is based on the geographical location of the segment assets. All segment revenues are derived
in New Zealand.

Segment assets are based on the geographical location of the development property. All segment assets are
located in New Zealand. The Group has no major customer representing greater than 10% of the Group’s total
revenues.

Page 7
CDL Investments New Zealand Limited and its Subsidiary
CDL Investments New Zealand Limited and its SubsidiaryCDL Investments New Zealand Limited and its Subsidiary
CDL Investments New Zealand Limited and its Subsidiary


Notes to the Condensed Interim Financial Statements
For the half year ended 30 June 2019 (unaudited)



5
55
5.
..
.

Material Events Subsequ
Material Events SubsequMaterial Events Subsequ
Material Events Subsequent to the end of the Interim Period
ent to the end of the Interim Periodent to the end of the Interim Period
ent to the end of the Interim Period



There were no material events subsequent to the end of the six month period ended 30 June 2019 (2018: Nil) that
would require disclosure.

6.
6.6.
6.

Changes in Contingent Liabilities and Contingent Assets since last Annual Ba
Changes in Contingent Liabilities and Contingent Assets since last Annual BaChanges in Contingent Liabilities and Contingent Assets since last Annual Ba
Changes in Contingent Liabilities and Contingent Assets since last Annual Balance Sheet Date
lance Sheet Datelance Sheet Date
lance Sheet Date



There were no changes in contingent liabilities and contingent assets that would require disclosure for the six month
period ended 30 June 2019 (2018: Nil). There were no contingent liabilities or contingent assets as at 30 June 2019
(2018: Nil).

7
77
7.
..
.

Related Party Transactions
Related Party TransactionsRelated Party Transactions
Related Party Transactions



CDL Investments New Zealand Limited is a subsidiary of Millennium & Copthorne Hotels New Zealand Limited by
virtue of Millennium & Copthorne Hotels New Zealand Limited owning 66.26% (2018: 66.42%) of the Company and
having three out of six of the Directors on the Board. Millennium & Copthorne Hotels New Zealand Limited is 70.79%
(2018: 70.79%) owned by CDL Hotels Holdings New Zealand Limited (computed on voting shares), which is a wholly
owned subsidiary of Millennium & Copthorne Hotels plc in the United Kingdom. The ultimate holding company is
Hong Leong Investment Holdings Pte Ltd in Singapore.

During the six month period ending 30 June 2019 CDL Investments New Zealand Limited has reimbursed its parent,
Millennium & Copthorne Hotels New Zealand Limited, $159,000 (2018: $157,000) for expenses incurred by the
parent on behalf of the Group.

Subsidiary
SubsidiarySubsidiary
Subsidiary

Principal Activity
Principal ActivityPrincipal Activity
Principal Activity

% Holding by
% Holding by% Holding by
% Holding by


CDL Investments New Zealand Limited
CDL Investments New Zealand LimitedCDL Investments New Zealand Limited
CDL Investments New Zealand Limited


Balance Date
Balance DateBalance Date
Balance Date


CDL Land New Zealand
Limited
Property Investment
and Development
100.00 31 December

Associate
AssociateAssociate
Associate

Principal Activity
Principal ActivityPrincipal Activity
Principal Activity

% Holding by
% Holding by% Holding by
% Holding by


CDL Land New Zealand Limited
CDL Land New Zealand LimitedCDL Land New Zealand Limited
CDL Land New Zealand Limited


Balance Date
Balance DateBalance Date
Balance Date


Prestons Road Limited Service Provider 33.33 31 March

8.
8.8.
8.

Commitments
CommitmentsCommitments
Commitments



As at 30 June 2019, the Group had entered into contractual commitments for development expenditure and
purchases of land. Contractual agreements for the purchase of land are subject to a satisfactory outcome of the
Group's due diligence process, board approval, and OIO approval. Development expenditure represents amounts
contracted and forecast to be incurred in the remainder of 2019 in accordance with the Group’s development
programme.

In thousands of dollars

2019
20192019
2019

2018
20182018
2018


Development expenditure 21,252 26,830
Land purchases 33,717 -
54,969
54,96954,969
54,969

26,830
26,83026,830
26,830



9.
9.9.
9.

New accounting standard
New accounting standardNew accounting standard
New accounting standard



During the period, the Group adopted one new accounting standard, NZ IFRS 16 “Leases”, using the modified
retrospective approach. This standard requires a right-of-use asset and a corresponding lease liability to be
recognised on the balance sheet in respect of the leased assets. The lease expenses will be replaced with an
interest expense and an amortization expense in the income statement. This has no material effect on the Group’s
financial statements.

As at 30 June 2019, the Group recorded two motor vehicle leases as right-of-use assets totalling $30,000 (classified
under plant, furniture and equipment). The corresponding lease liabilities are classified under current liabilities of
$13,000 and non-current liabilities of $17,000. The leases had unexpired terms between 26 to 43 months. The
incremental borrowing rate of 14.55% was used to discount the leased assets and liabilities. The incremental
borrowing rate used in the transition required significant judgement and is subject to further review and refinement.
During the period, new costs were incurred on the amortization of right-of-use assets of $2,000 and on the lease
interest expense of $2,000. The principal repayment of the lease liabilities during the period was $8,000.