CDL’s 4Q15 PATMI increased 6.6% YoY to S$410.5m mostly due to gains from the monetization of three office assets through the group’s second Profit Participation Securities Platform in Dec15, a maiden S$12m contribution from the sale of Emerald House in the UK and higher profit recognition from development projects in Singapore.

FY15 PATMI cumulates to S$773.4m, up 0.5% from S$769.7m last year, and we judge these results to be broadly in line with expectations after accounting for one-time gains and extraordinary items. The group reports that the Brownstone EC, launched in Jul15, is now about 55% sold and other existing projects also registered reasonable sales over the year.

In Nov15, CDL won a 14k sqm residential site at Lorong Lew Lian for S$321m and will look to develop a condo project with 500 units. The office component of the South Beach project is over 97% leased and active marketing for leases in the retail component is ongoing.

The group also acquired two sites in the UK over the year and re-entered the Australian market. A final dividend of 8.0 S-cents and a special final dividend of 4.0 S-cents are proposed. We will speak with management regarding these results later this morning and, in the meantime, put our hold rating and fair value estimate of S$8.35 UNDER REVIEW.

Source: OCBC Research - 25 Feb 2016