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1 Level 3 64 Allara Street Canberra ACT 2600 (PO Box 1000 Civic Square ACT 2608) ABN Ph Fax August 2012 ASX Code: CNB Companies Announcement Platform Australian Stock Exchange Limited 20 Bridge Street SYDNEY NSW 2000 LODGEMENT OF HALF-YEAR REPORT JUNE 2012 DIVIDEND ANNOUNCEMENT Pursuant to Listing Rules 4.2A.1 and 4.2A.3, CIC Australia Limited (CNB) announces its half-year results in the form of the attached interim financial report and Appendix 4D for the 6 months ended 30 June As noted in Appendix 4D, CNB will pay an interim fully franked dividend of 1 cent per share on 16 November 2012 to all shareholders registered at 12 October The Dividend Reinvestment Plan will be in operation for this dividend and the DRP shares will be issued at the weighted average market price during the five trading day period starting on the second business day after the Record Date. The last date for receipt of election notices for the Dividend Reinvestment Plan for this dividend is 12 October Issued by: CIC Australia Limited Contact: Melanie Andrews Company Secretary Telephone Fax melanie.andrews@cicaustralia.com.au

2 Appendix 4D Half yearly report. Name of entity Appendix 4D Half Yearly Report ABN Half year ended JUNE 2012 Results for announcement to the market $A'000 Revenues from ordinary activities Down 92% to 6,548 Explanation See Review and results of operations in Directors Report Profit from ordinary activities after tax attributable to members Down 101% to (51) Explanation See Review and results of operations in Directors Report Net profit for the period attributable to members Down 101% to (51) Explanation See Review and results of operations in Directors Report Dividends (distributions) Amount per security Franked amount per security Interim dividend 1c 1c Explanation Record date for determining entitlements to the dividend 12 October 2012 Date on which dividend is payable 16 November /6/2012 Appendix 4D Page 1

3 Appendix 4D Half yearly report Current period Previous corresponding Period Net tangible asset backing per ordinary security $0.62 $0.63 Control gained over entities during the period Name of entity Date of the gain of control Contribution of entity to the reporting entity s profit/(loss) from ordinary activities during the current period Contribution of entity to the reporting entity s profit/(loss) from ordinary activities during the whole of the previous corresponding period $ $ Control lost over entities during the period Name of entity Date of the loss of control Contribution of entity to the reporting entity s profit/(loss) from ordinary activities during the current period Contribution of entity to the reporting entity s profit/(loss) from ordinary activities during the whole of the previous corresponding period $ $ Dividend or Distribution Reinvestment Plans CIC Australia Limited has a Dividend Reinvestment Plan which was established during The last date for receipt of election notices for the final dividend is 12 October /6/2012 Appendix 4D Page 2

4 Appendix 4D Half yearly report Details of associates and joint venture entities Name of entity Percentage of ownership interest held at end of period or date of disposal Contribution to net profit (loss) of consolidated entity Current period Previous corresponding period Current period $A % 50% Previous corresponding period - $A 000 Lightsview Joint Venture CBT Joint Venture 40% 40% - (3) Lyons Joint Venture 50% 50% 148 1,045 Crace Developments 80% 80% Pty Limited Googong Township 50% - (363) - Unit Trust CIC-LDC Pty 85% 85% (747) - Limited Forde Developments 50% 50% 3,048 1,064 Pty Limited This report is to be read in conjunction with the most recent annual financial report 30/6/2012 Appendix 4D Page 3

5 ABN: Interim Financial Report 30 June 2012

6 Contents Page Directors report 2 Financial report Consolidated interim statement of comprehensive income 8 Consolidated interim statement of changes in equity 9 Consolidated interim statement of financial position 10 Consolidated interim statement of cash flows 11 Notes to the interim financial statements 12 Directors declaration 15 Independent review report 16

7 2012 INTERIM REPORT DIRECTORS REPORT The directors present their report together with the consolidated interim financial report for the six months ended 30 June 2012 and the review report thereon. DIRECTORS The directors of the Company at any time during or since the end of the interim period are: Name Period of directorship Non-executive Mr Maurice W Loomes (Chairman) Appointed 12 September Chairman since Mr Donald A Fox Appointed 12 September Mr John A Mackay Appointed 27 February Mr Philip A Tunstall Appointed 25 August Executive Mr Colin J Alexander Appointed 2 September Chief Executive Officer. Mr Anthony N Carey Appointed 2 September Chief Operating Officer. REVIEW OF OPERATIONS CIC PROJECTS STRONG SECOND HALF YEAR AND STRONG 2013 CIC has a long history of reporting lumpy profits. This can be partly due to delays in the timing of projects and the final settlement of sales contracts which can push profits into the next reporting period. This year we have experienced delays in settlements due to wet weather and delays in obtaining titles for projects from various Government agencies, but our overall 2012 operating projections are still in line with CIC s budgets. The half year operating statutory profit before tax and before write-downs to 30 June 2012 is $0.2m. CIC has reviewed the value of its investments and has provided a net write-down of $1.8m. This relates mainly to our Bay Ridge and Eastern Industrial Estate projects. The post-tax loss after write-downs and allowing for an income tax benefit is $51,000 (2011 profit $6.2m). This result includes an amount of $1.1m expensed in accordance with Accounting Standards, for pre marketing and pre selling costs for three of our projects yet to commence construction. Already since 30 June 2012 to the date of this report, CIC projects have settled another 180 contracts with a sales value of $54.2m (CIC share $26.8m). In addition we have sales contracts exchanged but not yet settled to the value of $171.5m and sales instructions issued but not yet exchanged of $22.8m, all up sales in the pipeline of $194.3m (CIC share $105.6m). Based on this pipeline of sales, together with future projections, CIC expects to post a strong profit in the second half of 2012 and in An interim dividend of 1 cent per share has been declared. The Company remains compliant with all its banking covenants and continues to enjoy a first class relationship with our bankers. CIC remains a very robust entity with good underlying projects with strong partners, buoyant on-going sales, and good and demonstrable profitability. An update of CIC s projects over the past six months follows. 2

8 GOOGONG TOWNSHIP, NSW (CIC 50%) 2012 INTERIM REPORT DIRECTORS REPORT Googong Township Pty Limited (GTPL) is the new Joint Venture entity established by CIC and Mirvac for the development of Googong. Primary achievements over the six months to 30 June 2012 have been: Execution of the Joint Venture documentation and integration of CIC and Mirvac representatives into the Googong Township Board, Project Management Committee and Project Team. Public launch of the Googong Vision. Nearly 1,000 people attended the National Convention Centre to see a multi-media presentation on the Googong Vision. The new website, with new brand and logo, was also launched. First releases of off the plan sales to the Googong Builders Guild and the public at Googong begin. Civil works begin on site. Works include bulk earthworks for 337 lots (Neighbourhood 1A, Stages 1 and 2) and civil and electrical reticulation for 170 lots (NH1A stage 1). Development consent obtained for Club Googong. 190 land sales contracts exchanged, exceeding the Business Plan target. CRACE, ACT (CIC 40%) Crace Developments Pty Limited (a Joint Venture entity of CIC) is the Joint Venture partner with the ACT Government s Land Development Agency, while CIC in its own right is the Project Manager and is also responsible for all sales and marketing. The first half of 2012 has seen the development of multiple stages of works with 75% of the subdivision works now complete. Sales have also been strong with 270 sales in the 6 months taking total sales past 75% of the total project yield of Construction of 260 of the 310 terrace homes is complete with the remainder to be finished before the end of Some of the community s major amenities have been advanced and include : Construction of Crace s main recreation park, a 4.5 hectare park with playing fields, sporting and BBQ facilities and a large wetland, is nearing completion and this will be the jewel in the crown of Crace s extensive network of open space. Sale of the site for Crace Central, the project s retail centre, to the Koundouris Group for the development of a 1500m2 Supabarn supermarket and specialty retail shops. Construction is expected to commence shortly. The sale of a site for a medical centre to local GP s, who plan to start construction of the facility in early Release to the market of a childcare centre site. A developer/operator is expected to be announced shortly. Sale of a 1.3 hectare parcel of land to Goodwin Aged Care Services for 150 independent living units. Completion of the Hilltop Park including dedication of a memorial to the WWII Battle of the Coral Sea. The dedication was undertaken by Vice Admiral Peter Jones in the presence of many descendents of Kate Crace, the original settler of the land after whom the suburb is named. Kate s son, Vice Admiral Sir John Crace, was the navy commander whose taskforce blocked the Japanese invasion of Port Moresby during World War II. FORDE, ACT (CIC 25%) Forde is owned in conjunction with Lend Lease and the ACT Land Development Agency. CIC has a 25% interest in the project and, with Lend Lease, undertakes the project management and all sales and marketing for the project. There are only a few blocks left for sale and Forde has completed all required sales of affordable house and land packages that were offered by the JV. Civil construction work was completed in December 2011 with final landscaping due for completion in early

9 2012 INTERIM REPORT DIRECTORS REPORT THE AMBASSADOR, DEAKIN, ACT (CIC 100%) The Ambassador has now been completed with all units being sold as at June 30. This project has been an outstanding success for CIC and has captured a reputation for being one of the most successful apartment developments that Canberra has seen. QUAYSIDE APARTMENTS, KINGSTON, ACT (CIC 100%) Our Quayside apartments project is located at the Kingston Foreshore, a major redevelopment precinct in Canberra adjacent to Lake Burley Griffin. This project, as reported previously, should have been well and truly under construction by now, but, has been the subject of continual legal objections by the adjoining developer. Subsequent to the previous report we have been successful in having the objector withdraw from all actions in the Supreme Court and ACAT, enabling ACTPLA to provide an unconditional development approval to CIC. Final design and tender documentation has progressed for building approval and tender release. A new Quayside marketing campaign, relaunching the project, was released in June. Subject to sales progress and Board approval, management is targeting an October construction commencement. Currently in excess of 50% of the apartments have been sold. While economics of the project have been significantly compromised as a result of these delays, we still expect the project to return a reasonable margin to CIC and return all sunk costs to date. EASTERN INDUSTRIAL ESTATE, ACT (CIC 100%) Eastern Industrial Estate, located adjacent to the Queanbeyan/ACT border, will comprise 125 broad acre lots when fully developed. The estate has focused on providing small industrial blocks to the market, a product which is largely not catered for in the Territory. Servicing works for the subdivision of the land purchased in late 2007 is now well progressed with leases registered for 64 lots to date (Stages 1 and 2A). Bulk earthworks and remediation of the later stages is also substantially complete. The market for industrial land in the region remains slow, but a distinct increase in interest has been evident since registration of the Stage 2A lots. Despite achieving some sales in the past months, it is anticipated that the annual sales rates into the short to medium term will remain slow. On-going economic uncertainty, pending local and federal elections, and also the release of competing land by the Land Development Agency have slowed this market and will continue to restrain this project LIGHTSVIEW (ADELAIDE), SA (CIC 50%) The Lightsview Joint Venture between CIC and the SA Government s Urban Renewal Authority (formerly Land Management Corporation) continues to perform well above the competition in the greater Adelaide region. Strong sales activity at Lightsview has been bolstered by the increased diversity made possible with the introduction of two new packaged housing products, designed, marketed and sold by CIC and built under licence by partner builders. 4

10 2012 INTERIM REPORT DIRECTORS REPORT The new products, the Loft 38 and Terrace 262 are both small lot attached products that have been designed and priced to attract the young professional market. Turnkey price points for completed house and land are $279,950 and $375,000 respectively and include additional development returns to CIC over and above our standard returns on basic lot sales. Coinciding with the launch of a new range of housing options, we also implemented our revised Realty Business Plan for the project. This is based around bringing all sales activity in-house and expanding the range of realty services to provide a one stop shop for all Lightsview home purchases and rentals. In January 2012 construction also commenced on the permanent Sales and Information Centre scheduled to open in January 2013, signifying the first step forward in delivering the Town Centre masterplan. The 350m2 building will house our onsite sales and project team. As agreed with the State Government in late 2011, further land has been provided to the Joint Venture from the adjoining vacant Ross Smith High School site for the commencement of construction of a new major entrance from Hampstead Road, a major North South Arterial. This is planned to open in January 2013, and it will be the first time we will have had the opportunity to create a front door for the project onto a main road. In early 2012 the Ministerial rezoning of Lightsview commenced and is currently in the final stages of public consultation without any material issues being raised. The rezoning will result in a significant increase in allowable commercial floor space, therefore paving the way for the delivery of our vision for the Lightsview Town Centre. The new zoning will also allow much greater flexibility in designing and delivering further innovation in higher density housing. Commercially the project continues to deliver strong returns for both Joint Venture partners. In particular Lightsview has recorded a strong sales result for the first half 2012 against the back drop of a very depressed real-estate market in Adelaide. For the full year Lightsview is expected to deliver a similar result, once again significantly out selling all other comparable projects within the market. THE HEIGHTS, DURACK NT (CHARLES DARWIN UNIVERSITY) (CIC 42.5%) CIC, in conjunction with the Larrakia Development Corporation and CDU, are the development partners for the creation of a new residential community at the Palmerston campus of the Charles Darwin University. The suburb of Durack (in which the University is located) is immediately adjacent to the Palmerston City Centre, and is perhaps the most sought after address in Palmerston. Part of the University s land has now been determined to be surplus to requirements, and is to be developed into a diverse new community in the heart of the City and surrounding the University s on-site facilities. CIC has obtained the rezoning of the subject site and gazettal occurred 22 February Since that date development approvals have been obtained for 300 plus allotments over seven stages. The project is likely to yield a maximum of 882 new dwellings, and will take the lead in Darwin in the delivery of a percentage of a range of housing types, including a commitment to delivery of a minimum of 15% of the homes in the affordable bracket. With increasing commercial and strategic interest in the Top End, The Heights at Durack is an exceptional opportunity for CIC, and allows the company to consolidate its presence and position in the Darwin housing market. 5

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13 2012 INTERIM FINANCIAL REPORT Consolidated interim statement of comprehensive income For the six months ended 30 June 2012 In thousands of AUD 30 June June 2011 Revenue 6,548 81,593 Cost of sales (1,476) (64,246) Gross profit 5,072 17,347 Other income Share of profit of equity accounted investees (net of tax) 3,835 2,501 Property selling and holding expenses (773) (730) Corporate and administrative expenses (7,366) (8,436) Project investigation expenses (264) (499) Results from operating activities ,551 Financial income Financial expenses (1,195) (1,632) Net financing (expense) (585) (824) Write down of inventory to net realisable value (1,840) (2,007) (Loss) / profit before income tax (1,618) 7,720 Income tax benefit / (expense) 1,567 (1,518) Total comprehensive (loss) / income for the period (51) 6,202 Earnings per share Basic earnings per share (AUD cents per share) (0.04) 5 Diluted earnings per share (AUD cents per share) (0.04) 5 These consolidated interim financial statements should be read in conjunction with the accompanying notes. 8

14 2012 INTERIM FINANCIAL REPORT Consolidated interim statement of changes in equity For the six months ended 30 June 2012 In thousands of AUD Issued capital Share option reserve Retained earnings Total Equity Balance at 1 January , ,533 80,706 Profit for the period - 6,202 6,202 Equity settled transactions Shares issued DRP Transfers to retained earnings - (209) Dividends to shareholders - - (3,743) (3,743) Balance at 30 June , ,201 83,567 Balance at 1 January , ,177 88,577 Profit for the period - - (51) (51) Equity settled transactions Shares issued DRP Transfers to retained earnings - (25) 25 - Dividends to shareholders - - (3,761) (3,761) Balance at 30 June , ,390 85,003 These consolidated interim financial statements should be read in conjunction with the accompanying notes. 9

15 2012 INTERIM FINANCIAL REPORT Consolidated interim statement of financial position As at 30 June 2012 In thousands of AUD 30 June December 2011 Assets Cash and cash equivalents 3,257 1,262 Trade and other receivables 3,108 15,798 Inventories 13,416 15,543 Assets classified as held for sale - 24,996 Prepayments Total current assets 20,327 58,334 Trade and other receivables 9,414 - Inventories 31,630 55,335 Investments in equity accounted investees 66,680 39,793 Investments - other Deferred tax assets 6,868 5,259 Property, plant and equipment 1,778 2,078 Total non-current assets 116, ,490 Total assets 136, ,824 Liabilities Trade and other payables 5,114 6,204 Loans and borrowings 7,770 16,086 Employee benefits 1,190 3,043 Provisions - 1,252 Total current liabilities 14,074 26,585 Trade and other payables Loans and borrowings 37,000 45,000 Employee benefits Provisions Total non-current liabilities 37,645 45,663 Total liabilities 51,719 72,248 Net assets 85,003 88,576 Equity Share capital 62,015 61,821 Reserves Retained earnings 22,390 26,177 Total equity 85,003 88,576 These consolidated interim financial statements should be read in conjunction with the accompanying notes. 10

16 2012 INTERIM FINANCIAL REPORT Consolidated interim statement of cash flows For the six months ended 30 June 2012 In thousands of AUD 30 June June 2011 Cash flows from operating activities Cash receipts from customers 27,040 90,398 Cash paid to suppliers and employees (13,634) (38,646) Cash generated from operations 13,406 51,752 Interest paid (1,870) (3,060) Net cash from operating activities 11,536 48,692 Cash flows from investing activities Interest received Acquisition of property, plant and equipment (210) (59) Dividends and distributions from associates and joint venture entities 3,750 4,100 Payments for other investments - (25) Payments for joint venture entity (1,038) (304) Loan to joint venture entity (4,078) - Repayment of loan from joint venture entity 12,800 1,600 Net cash from investing activities 11,594 5,594 Cash flows from financing activities Proceeds from borrowings 16,501 31,768 Repayment of borrowings (32,817) (79,615) Dividends paid (4,819) (3,466) Net cash (used in) financing activities (21,135) (51,313) Net increase in cash and cash equivalents 1,995 2,973 Cash and cash equivalents at 1 January 1,262 1,965 Cash and cash equivalents at 30 June 3,257 4,938 These consolidated interim financial statements should be read in conjunction with the accompanying notes. 11

17 2012 INTERIM FINANCIAL REPORT NOTES TO THE INTERIM FINANCIAL STATEMENTS 1. Reporting entity CIC Australia Limited (the Company ) is a company domiciled in Australia. The consolidated interim financial report of the Company as at and for the six months ended 30 June 2012 comprises the Company and its subsidiaries (together referred to as the Group ) and the Group s interest in associates and jointly controlled entities. The consolidated annual financial report of the Group as at and for the year ended 31 December 2011 is available upon request from the Company s registered office or at 2. Statement of compliance The consolidated interim financial report is a general purpose financial report which has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act The consolidated interim financial report does not include all of the information required for a full annual financial report and should be read in conjunction with the consolidated annual financial report of the Group as at and for the year ended 31 December This consolidated interim financial report was approved by the Board of Directors on 24 August The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with the Class Order, amounts in the financial report have been rounded off to the nearest thousand dollars, unless otherwise stated. 3. Significant accounting policies The accounting policies applied by the Group in this consolidated interim financial report are the same as those applied by the Group in its consolidated financial report as at and for the year ended 31 December Estimates The preparation of the interim financial reports requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing this consolidated interim financial report, the significant judgements made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial report as at and for the year ended 31 December Segment reporting For the six months ended 30 June The Group has one reportable segment, property development which is the Group s strategic business unit. The CEO reviews internal management reports for the strategic business unit on a monthly basis. Property development includes the acquisition, development and sale of real estate property. 12

18 2012 INTERIM FINANCIAL REPORT NOTES TO THE INTERIM FINANCIAL STATEMENTS 6. Inventory During the period 1 January to 30 June 2012 a gross write down to net realisable value of $2,099 thousand (30 June 2011: $2,007 thousand) was recognised in relation to inventory. A reversal of a previous writedown of $259 thousand was also recognised during the period. 7. Dividends For the six months ended 30 June June June 2011 In thousands of AUD The following dividends were paid by the Group. $0.01 interim ordinary 1,252 - $0.03 final ordinary (2011: $0.03) 3,761 3,743 5,013 3,743 After the balance sheet date a 1 cent interim dividend was proposed by directors. The financial effect of this dividend has not been brought to account in the financial statements for the six months ended 30 June 2012 and will be recognised in subsequent financial reports. 8. Related parties During the six months ended 30 June 2012, the following related party transactions occurred. Transaction value Six months ended In thousands of AUD 30 June June 2011 Services provided to JV entities 7,108 2,875 Financial income received from JV entities At 30 June 2012, the following were the balances relating to related party transactions. Balance outstanding 30 June June 2011 Trade debtors 2, Loans to JV entities 3,599 14,319 Trade creditors - 1 Loans from JV entities 1,250 - For details on these arrangements, refer to the 31 December 2011 annual financial report. 13

19 2012 INTERIM FINANCIAL REPORT NOTES TO THE INTERIM FINANCIAL STATEMENTS 9. Loans and borrowings At 30 June 2012, the Group had $7.8 million in borrowings that mature in less than 12 months and are classified as a current liability in the statement of financial position. On 30 June 2012 the multi option facility was reduced to a limit of $47 million in accordance with the facility agreement. The facility was drawn to $40 million at 30 June The facility limit reduces to $37 million by 31 December 2012 and $30.5 million by 31 December The facility expires 28 February All other terms of the facility agreement remain unchanged. 10. Issued capital During the period 1 January to 30 June 2012, 391 thousand shares were issued relating to the dividend reinvestment plan. 11. Subsequent events For dividends declared after 30 June 2012, refer to note 7. Apart from the above, there has not arisen in the interval between the end of the reporting period and the date of this report, any item, transaction or event of a material and unusual nature likely to significantly affect the operations of the Group. 14

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