Cedar Woods Properties Limited (ASX: CWP) Announces Significant FY26 Earnings Guidance Upgrade

Cedar Woods Properties Limited (ASX: CWP) has announced a significant upgrade to its FY26 earnings guidance, elevating expected NPAT growth from 10% to 15% following strong first-quarter performance. The ASX-listed property developer has achieved record presales of $763 million at the end of Q1 FY26, representing a 36% increase year-on-year. This positions the company for what management describes as a “record profit” year and constitutes a notable ASX announcement for investors.

The Cedar Woods Properties FY26 guidance upgrade reflects strong sales momentum driven by both robust volumes and pricing growth as Cedar Woods releases new stages and projects into what the company characterises as a significantly undersupplied housing market. This performance upgrade signals Cedar Woods’ strengthening position in the Australian residential development sector, with the company’s market capitalisation currently standing at approximately $667 million.

What Factors Drove the Cedar Woods Properties FY26 Guidance Upgrade?

The company’s first-quarter results demonstrate the strength of Australia’s housing market fundamentals. Cedar Woods achieved 389 gross sales in Q1 FY26, representing a 17% increase compared to the same period last year and 7% higher than Q4 FY25 volumes. This performance prompted management to reassess their earnings outlook and announce the guidance upgrade.

Key Performance Metrics:

• Record presales: $763 million (up 36% year-on-year from $560 million)
• Settlement pipeline: $410 million expected to settle over remainder of FY26
• Future earnings visibility: $353 million across FY27-FY28
• Presold projects: Over 90% of projects forecast to settle in FY26

The presales growth from $660 million at 30 June 2025 to $763 million by the end of Q1 represents a 16% increase in just three months, highlighting accelerating sales momentum. This performance has been supported by a combination of population growth, critically low housing supply, stable employment outlook, moderating inflation, and easing interest rates.

Furthermore, the Cedar Woods Properties FY26 guidance upgrade reflects management’s confidence that this sales momentum will continue into Q2 and beyond, driven by favourable market conditions and the company’s strategic positioning across multiple states.

How Robust is Cedar Woods’ Development Pipeline Supporting Future Growth?

Cedar Woods maintains a robust development pipeline of approximately 9,400 lots, dwellings, and office units across 35 projects spanning Queensland, Western Australia, Victoria, and South Australia. The vast majority of projects in the pipeline are actively being delivered and generating earnings for the company, which provided confidence for the upgraded guidance.

The company’s strategic positioning across four key Australian states provides diversification benefits whilst capitalising on regional housing demand. Western Australia has shown particularly strong performance, with robust sales across various product types, especially at land estates. This geographical diversification has been instrumental in supporting the upgraded guidance.

Regional Performance Overview:

• Western Australia: Strong sales momentum across all product types, particularly land estates
• Queensland: Solid market conditions with strong fundamentals despite fewer stage releases
• Victoria: Subdued Q1 performance but improving post-quarter with 85% of Mason Quarter release sold in one day!
• South Australia: Expected volume increase in Q2 with Sereno apartment project launch

The company’s financial strength supports continued pipeline development through $330 million corporate finance facilities with maturity terms of 3 years ($264 million) and 5 years ($66 million), providing long-term funding security. This substantial funding capacity enables Cedar Woods to pursue additional acquisition opportunities that will underpin earnings beyond FY26.

Why Are Cedar Woods’ Record Presales Crucial for Investor Confidence?

Presales represent contracted sales that haven’t yet settled, providing property developers with crucial forward earnings visibility and cash flow predictability. Cedar Woods’ record $763 million presales figure is particularly significant because it extends earnings certainty across multiple financial years, forming the foundation of the Cedar Woods Properties FY26 guidance upgrade.

The settlement timeline for these presales offers investors clear visibility into future performance. Approximately $410 million is expected to settle over the remainder of FY26, with $353 million to flow through FY27 and FY28. This extended settlement profile means Cedar Woods has secured approximately two to three years of earnings visibility, significantly reducing execution risk for investors.

Presales Benefits for Investors:

• Enhanced earnings predictability beyond current financial year
• Reduced exposure to market volatility
• Improved cash flow planning capabilities
• Greater confidence in dividend sustainability
• Strong foundation for future guidance upgrades

The company’s projects forecast to settle in FY26 are now over 90% presold, providing notable certainty for the current financial year’s performance. This level of presales coverage substantially de-risks the upgraded guidance and demonstrates the strength of demand for Cedar Woods’ products.

What Market Conditions Support the Cedar Woods Properties FY26 Guidance Upgrade?

The Australian housing market presents significant opportunities for well-positioned developers like Cedar Woods. Government policies at state, local, and federal levels are actively supporting new housing supply initiatives, creating favourable operating conditions that justify the guidance upgrade.

Supportive Policy Environment:

• Fast-tracked planning approvals accelerating project delivery
• Infrastructure contribution programmes reducing development costs
• Stamp duty exemptions for new housing stimulating demand
• Home deposit guarantee scheme improving first-home buyer accessibility
• Additional building height approvals increasing project returns

These policy initiatives are expected to sustain demand for Cedar Woods’ products throughout the outlook period. The company’s projects, many of which offer affordable housing options, are particularly well-positioned to benefit from these expansionary policies and the interest rate cuts that have occurred during 2025.

Moreover, approval for additional building heights at several apartment projects has been achieved or is being sought, which management expects will boost project return metrics and expand the overall pipeline of dwellings available for delivery. This regulatory support provides further confidence in the sustainability of the upgraded guidance trajectory.

The combination of population growth and critically low housing supply creates a structural demand backdrop that extends well beyond the current financial year. This undersupplied market environment represents a significant tailwind for Cedar Woods’ earnings growth potential.

How Will Cedar Woods Manage Capital to Deliver on Upgraded Guidance?

Cedar Woods has implemented a comprehensive capital management strategy that balances growth investment with shareholder returns. The company’s strong balance sheet, characterised by modest gearing and significant undrawn debt facilities, positions it well for continued acquisition activity that will support earnings growth beyond the upgraded FY26 guidance.

Capital Management Highlights:

• FY25 final dividend: 19 cents per share paid on 31 October 2025
• Dividend Reinvestment Plan (DRP): Operating at 2.5% discount to market price
• Bonus Share Plan (BSP): Available at same discount rate
• Full underwriting: Supported by Euroz Hartleys, Bell Potter, and Shaw and Partners
• DRP/BSP issue price: $7.42 per share

The DRP/BSP initiative provides balance sheet flexibility whilst enabling Cedar Woods to pursue additional acquisition opportunities. Management has indicated that forecast record earnings in FY26 are expected to support record dividend distributions for shareholders, demonstrating the company’s commitment to returning value whilst funding growth.

This capital structure provides Cedar Woods with substantial acquisition capacity to replenish and build its development pipeline, ensuring the company can capitalise on market opportunities whilst maintaining financial prudence. The balance between returning capital to shareholders and investing in growth projects underpins management’s confidence in the upgraded guidance.

What Strategic Acquisitions Support Long-Term Growth Beyond FY26?

Cedar Woods has demonstrated its acquisition capabilities through recent major project additions. In late FY25, the company acquired two significant developments: an 860-lot subdivision in Mt Barker, South Australia, and a 300+ apartment project in Fairfield, Victoria. These acquisitions strengthen the pipeline that supports the upgraded FY26 guidance and future growth.

The Mt Barker project, currently in the design phase with planning approval expected in 2026, represents a substantial addition to the company’s South Australian portfolio. This project will contribute to earnings in FY27 and beyond, providing visibility beyond the current upgraded guidance period.

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