JSE-listed Calgro M3, the property and property-related investment company has reported a maiden dividend for the period ended 29 February 2024.
Wikus Lategan, the CEO of Calgro M3, said that the group takes pride in reporting robust results this year, with a record-breaking performance that includes net asset value growth of 40.60% per share.
He said that the group's accomplishments in a challenging market highlight its commitment to sustainability, and strategic expansion. This approach has bolstered the future pipeline, comprising 23,370 opportunities worth about R16.4 billion. Additionally, the Bankenveld District City project will contribute at least R18 billion, delivering 20,000 to 30,000 opportunities over 15 to 20 years.
He indicated that the Memorial Parks business offers over 120 000 burial opportunities. “We have implemented strategic efforts to enhance open market sales and generated consistent cash flows, getting us ever closer to the goal of covering Group overheads and interest expense from the Memorial Parks cash flows.”
The group also acquired a new memorial park in Rustenburg, adding approximately 25 533 burial opportunities to the pipeline.
The Residential Property Development segment, which remains the largest revenue source (96%), operates in Gauteng and the Western Cape, with nine active projects.
Lategan said that while revenue across the group’s projects had decreased in the 2024 financial year the overall segment gross profit improved to R330.63 million or 26.62% – a noteworthy increase from the previous year’s 23.15%.
“We also made commendable progress in increasing other income, achieving a 28% increase due to higher bond commissions, supporting the focus on open-market housing. These gains reflect our commitment to revenue diversification, ensuring stable customer handovers and consistent cash flow.”
Included within the serviced opportunities are 1 100 opportunities, with construction commencing in the first six months of the 2025 financial year. More than 2 970 opportunities are currently being serviced.
“Despite the tough market, major banks continue to support the industry, recognising the need for housing and its role in job creation and societal wellbeing. Additionally, we increased our pipeline of existing projects by 2 182 opportunities, driven by an additional 804 opportunities arising from the group acquiring strategic land next to our Belhar project, with the remaining increase stemming from more efficient designs to improve our product offering.”
Lategan said that R314.58 million was invested in infrastructure at the Jabulani, Fleurhof, South Hills, and Belhar projects during the year, impacting the net cash from operations but creating long-term value from a capital allocation perspective.
In the Memorial Parks segment, he said that the 2024 financial year presented significant growth. “This growth is reflected not only in the 50.94% increase in gross profit but also in the significant increase of 40.7% in cash receipts, the highest since we started this segment in 2017.”
The national footprint has been strategically extended to six parks, the latest of which is expected to open in Rustenburg in the third quarter of 2024.
In this financial year, the group’s profit after tax reached R196.80 million, increasing from the previous year’s R186.29 million. The improved performance was due to an increase of 3.80% in gross profit margin, coupled with a 4.18% reduction in administrative expenses.
Despite these gains, total revenue fell by 15.79% to R1 284.54 million (2023: R1525.32 million). The increased focus on open-market sales, combined with delays in unit transfers and challenging economic conditions, played a part in the decrease in revenue.
“Our potential new product offering targeting lower LSM groups for affordable housing and memorial services intends to capture the current market demand. This, coupled with diverse revenue streams across various market segments in both businesses, positions us to make the most of the considerable housing deficit and robust memorial services sector demand,” Lategan said.
The group's share price is up 80% over the past year.
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