CDI 2019 Results Announcement

DIRECTORS’ REVIEW

Financial Performance

For the year ended 31 December 2019, CDL Investments New Zealand Limited (“CDI”) recorded a profit after tax
of $34.1 million (2018: $33.6 million). This result is the tenth consecutive year of profit growth for the company.

Property sales & other income totaled $91.8 million (2018: $85.0 million). Profit before tax also increased to
$47.4 million (2018: $46.7 million). Given slowing market conditions, the Board believes that this is a very
creditable result.

At 31 December 2019 shareholders’ funds increased to $235.5 million (2018: $210.6 million) and total assets
were $240.7 million (2018: $217.6 million). Net tangible asset per share (at book value) was 84.5 cents (2018:
75.7 cents).

Land portfolio

The independent market value of CDI’s land holdings was $315.6 million reflecting sales made in 2019 (2018:
$337.8 million) as at 31 December 2019. At cost, the portfolio was valued at $182.7 million (2018:$169.7 million)
in line with CDI’s accounting policies.

During the year, CDI acquired a total of 9.7 hectares of land in Hawkes Bay. Management is targeting further
acquisitions but only if pricing and location are competitive in line with the company’s investment criteria.

We announced in late December that sales of the first stages had commenced at our Dominion Road (Papakura,
South Auckland) and Kewa Road (North Shore, Auckland) subdivisions. Both of these developments are well
located and well priced and we expect to recognise these sales in the current year with development on further
stages to be also undertaken as well.

The commercial areas located at Prestons Park (Canterbury) and Stonebrook (Rolleston, Selwyn District) are
progressing well. Stonebrook is on track for completion and letting out in the first half of this year with construction
of Prestons Park due to be completed by the end of this year with letting in early 2021.

Dividend Announcement

The Board has resolved to maintain its fully imputed ordinary dividend at 3.5 cents per share payable on 15 May
2020. The record date will be 1 May 2020. The Dividend Reinvestment Plan will apply to this dividend.

Summary and Outlook

In the 2019 interim report, we noted that trading conditions were “challenging” and it is a credit to the work of the
CDI team, particularly in the latter part of 2019, that we have been able to a deliver a result better than the last
few years in a slowing market. These challenges are set to continue in 2020 but we are confident that the location
and quality of our developments are in areas which have high demand and will prove attractive to buyers.

The Board has set realistic goals for the year ahead and we are targeting an earnings result for 2020 which
reflects current market conditions. Shareholders can be confident that CDI has the land resources, the product
expertise and the future pipeline to achieve positive earnings and will be able to withstand the cyclical nature of
the property markets.

On behalf of my fellow directors, I thank our staff for their contributions to a profitable result in 2019.


Colin Sim
Chairman
10 February 2020

---

10 February 2020

CDL INVESTMENTS NEW ZEALAND RECORDS
A FULL DECADE OF PROFIT GROWTH

Property development company CDL Investments New Zealand Limited (NZX: CDI) today reported its results for
the year ended 31 December 2019.

CDI increased its profit after tax to $34.1 million with property sales & other income increasing by 7.9% to $91.8
million over the previous year.

“CDI has reported a decade of profit growth, which we think is a very creditable achievement, especially given
challenging market conditions”, said CDI’s Managing Director Mr. B K Chiu. “In the latter part of 2019 we had to
adjust and refine our sales and development strategies and shareholders can be pleased that those strategies
have worked and have translated into profit”, he added.

CDI also reported that it had acquired over 9 hectares of land in the past year in Hawkes Bay
and was targeting
further acquisitions.

“While our acquisitions over the past few years now give us sufficient land to sustain our core business over the
medium term, we are continuing to look for opportunities that meet our investment criteria. As our existing
commercial areas in Canterbury and Rolleston are both on track for letting this year, such opportunities could be
additional land or commercial developments”, said Mr. Chiu.

CDI’s Board resolved to maintain its dividend at 3.5 cents per share fully imputed which would be paid to
shareholders on 15 May 2020. The Record Date would be 1 May 2020 and the Dividend Reinvestment Plan
would apply.

Speaking to the prospects for the coming year, Mr. Chiu said that CDI had set realistic goals allowing for market
conditions.

“We will have profitable sales in 2020 and our results will reflect the market. More importantly, our message to
our shareholders is that they can be confident that we have land assets which will hold their value, product that
is in demand and a pipeline of sections across the country to deliver positive results. Our strategy will ensure
that we are able to go beyond the current property cycle”, he said.


Summary of results:

• Profit after tax $34.1 million (2018: $33.6 million)
• Profit before tax $47.4 million (2018: $46.7 million)
• Property sales & other income $91.8 million (2018: $85.0 million)
• Shareholders’ funds $235.5 million (2018: $210.6 million)
• Total assets $240.7 million (2018: $217.6 million)
• Net tangible asset value (at book value) 84.5 cents per share (2018: 75.7cps)
• Earnings per share 12.26 cents per share (2018: 12.10cps)


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

---

Results announcement



Results for announcement to the market
Name of issuer CDL Investments New Zealand Limited (CDI)
Reporting Period 12 months to 31 December 2019
Previous Reporting Period 12 months to 31 December 2018
Currency NZD

Amount (000s) Percentage change
Revenue from continuing
operations
$91,794 7.95%
Total Revenue $91,794 7.95%
Net profit/(loss) from
continuing operations
$34,140 1.48%
Total net profit/(loss) $34,140 1.48%
Interim/Final Dividend
Amount per Quoted Equity
Security
$0.035
Imputed amount per Quoted
Equity Security
$0.01361111
Record Date 1 May 2020
Dividend Payment Date 15 May 2020
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.85 $0.76
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Refer Chairman’s Review accompanying this announcement
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 09 353 5077
Contact email address takeshi.ito@cdli.co.nz
Date of release through MAP

10 February 2020

Audited financial statements accompany this announcement.

---

Distribution Notice




Please note: all cash amounts in this form should be provided to 8 decimal places

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
X

Record date
01/05/2020
Ex-Date (one business day before the
Record Date)
30/04/2020
Payment date (and allotment date for
DRP)
15/05/2020
Total monies associated with the
distribution
1

$9,758,195.30
Source of distribution (for example,
retained earnings)
Retained earnings
Currency
NZD
Section 2: Distribution amounts per financial product
Gross distribution
2

$0.04861111
Gross taxable amount
3

$0.04861111
Total cash distribution
4

$0.035
Excluded amount (applicable to listed
PIEs)
n/a
Supplementary distribution amount
$0.00617647
Section 3: Imputation credits and Resident Withholding Tax
5

Is the distribution imputed
Fully imputed
Partial imputation
No imputation

1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is
fully imputed the imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute
advice as to whether or not RWT needs to be withheld.

If fully or partially imputed, please
state imputation rate as % applied
6

28%
Imputation tax credits per financial
product
$0.01361111
Resident Withholding Tax per
financial product
$0.00243056
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
Nil
Start date and end date for
determining market price for DRP
04/05/2020 08/05/2020
Date strike price to be announced (if
not available at this time)
11/05/2020
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
Ordinary shares (new issue)
DRP strike price per financial product
[to be advised]
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
04/05/2020
Section 5: 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
09 353 5077
Contact email address
takeshi.ito@cdli.co.nz
Date of release through MAP

10/02/2020





6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.

---

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© 2020 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. 17

Independent Auditor’s Report
To the shareholders of CDL Investments New Zealand Limited
Report on the audit of the consolidated financial statements
Opinion
In our opinion, the accompanying consolidated
financial statements of CDL Investments New
Zealand Limited (the ’company’) and its subsidiary
(the 'group') on pages 1 to 16:
i. present fairly in all material respects the Group’s
financial position as at 31 December 2019 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 2019;
— 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 and taxation advisory.
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 $2.3m 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.

18

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
2019 development properties amounted to $182.7
million representing 77.6% 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 Directors’ Review and have nothing
to report in regards to it. The Annual Report is expected to be made available to us after the date of this
Independent Auditor's Report and we will report the matters identified, if any, to those charged with
governance.
Use of this independent auditor’s report
This independent auditor’s report is made solely to the shareholders as a body. Our audit work has been
undertaken so that we might state to the shareholders those matters we are required to state to them in the
independent auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept

19

or assume responsibility to anyone other than the shareholders as a body for our audit work, this independent
auditor’s report, or any of the opinions we have formed.
Responsibilities of the Directors for the consolidated financial
statements
The Directors, on behalf of the company, are responsible for:
— the preparation and fair presentation of the consolidated financial statements in accordance with generally
accepted accounting practice in New Zealand (being New Zealand Equivalents to International Financial
Reporting Standards);
— implementing necessary internal control to enable the preparation of a set of consolidated financial
statements that is fairly presented and free from material misstatement, whether due to fraud or error; and
— assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless they either intend to liquidate or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial
statements
Our objective is:
— to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error; and
— to issue an independent auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs NZ will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
A further description of our responsibilities for the audit of these consolidated financial statements is located at
the External Reporting Board (XRB) website at:
http://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1/

This description forms part of our independent auditor’s report.
The engagement partner on the audit resulting in this independent auditor's report is Aaron Woolsey.
For and on behalf of

KPMG
Auckland
10 February 2020