JSE-listed Calgro M3, the property and property-related investment company specialising in the development of Integrated Residential Housing Developments and the development and management of Memorial Parks, today announced solid interim results for the period ended 31 August 2024.
Wikus Lategan, the CEO of Calgro M3, said that strategic capital allocation, a core element of the operational philosophy, remained a priority, with significant investments made to ensure that the pipeline supports sustainability and puts a formidable platform for growth in place.
Calgro M3 said Residential Property Development pipeline exceeds 38 000 opportunities, with Memorial Parks at 120 000 graves.
“Our continued focus on creating affordable, high-quality homes and dignified final resting places while adapting to market fluctuations demonstrates our unwavering commitment to the housing and memorial park markets in South Africa.”
Operational overview
The Residential Property Development segment, which remains the largest revenue source accounting for 94% (August 2023: 97%), operates in Gauteng and the Western Cape, with nine active projects.
Lategan said that revenue for the segment decreased for the period under review, driven by reduced unit sales due to pressure on already constrained consumers, and delayed transfers given the current high interest rate and depressed economic cycle.
He added that the group banked over R200 million in cash during the first two weeks of September.
During the period, 869 units were handed over, while 1 539 units are under construction, with the majority expected to be completed by the end of February 2025. The intention is to start on another 1 592 units during the next six months, targeted for completion in the next financial year.
The group also has a further approximately 5 000 serviced and being serviced opportunities available.
Lategan said that to service the lower, high-demand end of the unhoused market, Calgro M3’s national average sales price for a core two-bedroom family apartment during the period was R636 617 (excluding VAT).
In the Memorial Parks segment, Lategan said that revenue grew by 59.05% to R31.7 million, accounting for 6% of group revenue. “The main goal for this segment remains cash generation for the Group that was up 52.79% to R 52.1 million and which covers 100% of Group overheads.
This segment’s resilience amid economic pressures highlights the enduring demand for dignified, well- maintained burial spaces, with a strategic focus entrenched in lay-by sales expansion and an enlarged presence across South Africa.
Key Highlights
Earnings per Share (EPS) rose to 101.40 cents, up from 78.88 cents in the prior year.
Headline Earnings per Share (HEPS) also increased to 101.40 cents, reflecting a 28.57% improvement over August 2023's 78.88 cents.
Revenue for the period decreased by 26.4% to R507 million, compared to R668.9 million in 2023.
Net Asset Value (NAV) per share climbed 6.92% to R14.29, up from R13.37 in February 2024.
Cash reserves grew by 37.73% to R168.9 million, reinforcing the Group’s financial stability.
A total of 869 residential units were handed over, with 1,539 units currently under construction.
While group revenue decreased from R689 million to R507 million, revenue generated within joint ventures increased from R23 million to R175 million.
The gross profit margin increased to 29.69% with Residential Property Development at 27.86% and Memorial Parks at 57.79%.
This, together with an increase in the share of profits from joint ventures, cost containment, and share buybacks, gave rise to a 28.55% increase in HEPS.
Cash and cash equivalents increased by 37.73% to R168.9 million (February 2024: R122.6 million), reflecting the strength of liquidity management.
The board announced the introduction of the inaugural dividend policy in the financial year ending 29 February 2024. The policy provides for dividends to be paid annually, calculated at a minimum of 5% of the HEPS.
No dividends were declared during the current interim reporting period.
Moving into the second half of 2024, Calgro M3 said it will continue its growth path. “Our robust pipeline, consisting of strategic large-scale developments Fleurhof, South Hills, Bankenveld and Belhar, combined with the trading out of other developments, positions us to deliver a future pipeline in excess of 38 000 units.
"These projects do not only represent financial returns, but they also represent our continued commitment to addressing South Africa’s housing needs and the offering of value-for-money homes that transform lives and communities.”
The Memorial Parks segment, showing strong growth, is a key expansion focus. "We aim to expand our dignified burial solutions to new provinces, meeting demand while enhancing cash generation and providing lasting value with our flexible offerings."
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