CDL Investments New Zealand Limited Reports 2025 Results and Strategic Developments

Summary of Results for the Year Ended 31 December 2025

CDL Investments New Zealand Limited (“CDI”) has released its audited financial statements for the year ended 31 December 2025, providing shareholders and investors with a comprehensive view of its financial performance, operational progress, and strategic positioning in a challenging market environment.

Key Financial Highlights

• Profit After Tax: \$11.1 million, a decrease of 28% from \$15.4 million in 2024.
• Profit Before Tax: \$15.4 million, down from \$26.7 million in 2024.
• Total Revenue: \$38.1 million, representing a 22.3% decline from \$49.1 million in 2024.
• Shareholders’ Funds: Remained robust at \$321.2 million (2024: \$319.7 million).
• Total Assets: \$331.6 million (2024: \$328.6 million).
• Net Tangible Asset Value: 109.7 cents per share (2024: 109.5 cents per share).
• Basic and Diluted Earnings Per Share: 3.78 cents (2024: 5.28 cents).
• Final Dividend Declared: 1.0 cent per share, fully imputed, payable on 15 May 2026.
• Dividend Reinvestment Plan (DRP): DRP applies to this dividend, with a record date of 1 May 2026.
• Cash and Cash Equivalents: Decreased to \$13.4 million from \$32.8 million in 2024, primarily due to continued investment in development activities.

Operational and Strategic Review

Market Environment and Company Response

The 2025 financial year was marked by subdued residential market conditions. Easing inflation and mortgage interest rates failed to significantly lift buyer confidence, with cost-of-living pressures and economic uncertainty leading to reduced transactional activity. Despite these headwinds, CDI continued to execute on its development pipeline, actively managing capital to preserve balance sheet strength and maintain flexibility for future opportunities.

Development Portfolio and Pipeline

• Active Developments: Progress continued at Iona (Havelock North) through Stages 1 and 2. Construction was completed at Prestons Park (Christchurch), with Stages 4 and 6 finalised. The Canterbury region, particularly Christchurch and Rolleston, continued to deliver solid performance, showing the benefits of CDI’s geographic diversification.
• Commercial and Industrial Expansion: Earthworks commenced at the Wairakei Road industrial project in Christchurch, supporting CDI’s focus on diversifying revenue streams beyond residential land development.
• Strategic Land Acquisitions: New agreements to acquire land in Havelock North (0.36 ha) and Hamilton (1.63 ha) were entered into, strengthening CDI’s position for future Fast-track development applications.
• Development Expenditure Commitments: As at 31 December 2025, CDI has committed \$29.9 million to development expenditure and \$4.9 million to land purchases, highlighting an active and well-funded pipeline.

Planning and Regulatory Environment

The timing of future developments remains influenced by evolving national and regional planning and land-use settings, with councils reassessing growth sequencing and land classifications. This has led to some constraints and extended timeframes for development delivery across the sector. CDI is responding by maintaining flexibility across its landholdings, staging investments, and seeking to accelerate zoning and consent processes, including the use of the Fast-track applications where appropriate.

• Fast-track Applications: During 2025, a Fast-track application was lodged for the Arataki Road development in Havelock North, with a decision expected in Q1 2026. Preparation also continued for Fast-track applications for a major 130-hectare residential and industrial development in Hamilton and for future urban land at Iona, Havelock North.
• Planning Setbacks and Responses: While the independent Hearing Panel recommended the inclusion of Iona land in the Napier-Hastings Future Development Strategy, local councillors decided against inclusion. CDI responded by entering the Fast-track process to advance urban zoning.

Portfolio Diversification and Risk Management

• Industrial and Commercial Asset Performance: The industrial warehouses at Wiri (Auckland) remained fully tenanted. The Prestons Park retail centre in Christchurch and Stonebrook retail centre in Rolleston are now fully leased, providing stable rental income streams. These assets contributed \$3.1 million in rental income for 2025 (2024: \$2.7 million), helping to offset residential market volatility.
• Resilience Through Diversification: Since 2019, CDI has pursued a deliberate diversification strategy to moderate exposure to residential market cycles. The Board considers this a key factor in managing earnings volatility and supporting long-term value creation.

Capital Management and Shareholder Returns

• Dividend Policy: The Board declared a fully imputed ordinary dividend of 1.0 cent per share for the 2025 financial year, reflecting a balanced approach to rewarding shareholders while retaining cash for future development and acquisition opportunities.
• Dividend Reinvestment Plan: The DRP remains in place, allowing shareholders to elect to receive shares instead of cash, aiding in capital management and shareholder value retention.

Tax and Regulatory Matters

• Tax Law Changes: Effective from 1 April 2024, the tax depreciation rate for commercial and industrial buildings reverted to 0%. This resulted in a significant one-off deferred tax liability in the prior year, but ongoing tax effects are now reflected in deferred tax balances. The effective tax rate for 2025 was 28% (excluding the one-off effect of tax depreciation changes in 2024).
• Pillar Two Model Rules: The Group is monitoring the international implementation of the OECD’s Pillar Two Model Rules for global minimum tax. These rules are not yet effective in New Zealand and currently have no tax impact on CDI’s results, but may become material in future years as New Zealand legislation is enacted.

Board and Management Updates

• Board Refresh: The Board welcomed independent non-executive director Julian Smith, bringing additional governance and strategic expertise.
• Management Strengthening: Key appointments in 2025 included a General Counsel & Company Secretary (Abigail Wong) and a Financial Controller (Geoff Donley), enhancing CDI’s governance and operational capabilities.

Outlook and Guidance

The Board maintains a cautiously optimistic outlook for 2026. While residential demand signals improved towards the end of 2025, any sustained recovery is expected to be gradual and will depend on broader economic conditions. CDI’s strong balance sheet, diversified asset base, and refreshed management and Board place the company in a robust position to leverage future opportunities as confidence returns to the property market.

The company will prioritise disciplined capital allocation, advance consented and Fast-track projects, and continue to seek strategic acquisitions as market conditions warrant.

Other Notable Matters

• Bank Guarantee: CDI maintains a \$75,000 bank guarantee as a listing requirement of the NZX.
• Related Party Transactions: Payments to parent company Millennium & Copthorne Hotels New Zealand Limited for shared services totalled \$596,787, with \$115,917 outstanding at year-end.
• Capital and Land Development Commitments: At year-end, CDI had \$34.9 million in outstanding contractual commitments for development and land purchases.

Potentially Price-Sensitive Information for Shareholders

• The significant drop in profit and revenue reflects broader sector headwinds, which may impact market sentiment and share price in the short term.
• The company’s continued focus on capital discipline, portfolio diversification, and strategic land acquisitions positions it well for eventual market recovery.
• The application for Fast-track consents and the outcome of these regulatory processes could materially alter the development pipeline and future earnings potential—investors should monitor these closely.
• The final dividend of 1.0 cent per share and the continuation of the DRP is of immediate relevance to shareholder returns and reinvestment options.
• Ongoing monitoring of international tax developments, especially the OECD’s Pillar Two Model Rules, is prudent as future legislative changes could impact CDI’s effective tax rate.

Disclaimer

This article is a summary and interpretation of CDL Investments New Zealand Limited’s audited 2025 financial results and related disclosures. It is intended for informational purposes only and does not constitute investment advice. Shareholders and investors should review the full set of financial statements and consult a professional adviser before making investment decisions. Market conditions and regulatory environments are subject to change, which may affect future performance and share value.

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