Calgro M3: Paving a Sustainable Future with Quality Living and Parks

JSE-listed Calgro M3, specializing in Integrated Residential Housing Developments and Memorial Parks, announced solid interim results for the period ended 31 August 2024. The Group continues to be a leader in lifestyle, security, & high-specification offerings, achieving an above-average gross profit margin of 29.69%.

• Earnings Per Share (EPS) and Headline Earnings Per Share (HEPS) increased to 101.40 cents (August 2023: 78.88 cents).
• 869 residential units handed over.
• 1,539 residential units under construction, with most expected to be completed by the year-end.
• 4201 additional opportunities ready for development.
• Net Asset Value (NAV) rose 6.92% to R14.29 per share (February 2024: R13.37).
• Cash increased by 37.73% to R168.9 million (February 2024: R122.6 million).
• Loan to value stands at 30.40%.
• Retained level 1 B-BBEE accreditation

Advancing Quality Living and Parks Through Strategic Development

Wikus Lategan, CEO of Calgro M3, emphasized the importance of strategic capital allocation for sustainability, with a Residential Property Development pipeline exceeding 38,000 opportunities and 120,000 graves available in Memorial Parks. “Our focus on creating affordable, high-quality homes and dignified final resting places shows our commitment to South Africa’s housing and memorial park markets,” he said.

Operational Overview The Residential Property Development segment generates 94% of revenue (August 2023: 97%), primarily operating in Gauteng and the Western Cape with nine active projects. Although revenue decreased due to reduced unit sales and delayed transfers caused by high-interest rates, over R200 million in cash was banked in early September.

During this period, 869 units were handed over and 1,539 units are under construction, expected to be completed by February 2025. The intention is to start on 1,592 additional units in the next six months.

To meet the needs of the lower-income market, Calgro M3's national average sales price for a two-bedroom apartment was R636,617 (excluding VAT).

The transfer of the Bankenveld District City land to a joint venture was a strategic milestone, with R250 million allocated for infrastructure development, of which 60% will be funded by Calgro M3.

Calgro M3 invested R138 million in infrastructure across key projects, including Fleurhof and Jabulani, with plans for further expansion.

Strengthening Quality Living and Parks Through Financial Growth

Memorial Parks Segment Revenue from this segment grew by 59.05% to R31.7 million, accounting for 6% of total Group revenue. Cash generation increased by 52.79% to R52.1 million, covering all Group overheads. The demand for dignified burial spaces remains strong, focusing on lay-by sales expansion.

Financial Review Despite a challenging economic environment, Calgro M3 reported resilient interim results. Total Group revenue decreased from R689 million to R507 million, but revenue from joint ventures surged from R23 million to R175 million. The Group’s gross profit margin reached 29.69%.

Cash and cash equivalents increased by 37.73% to R168.9 million, highlighting robust liquidity management. Borrowings rose to R1.04 billion due to strategic drawdowns.

Outlook Looking ahead, Calgro M3 aims to accelerate unit transfers and boost sales, with a robust pipeline including significant developments in Fleurhof, South Hills, Bankenveld, and Belhar. Lategan stressed the importance of operational efficiencies to enhance profitability and shareholder value.

The Memorial Parks segment remains a key focus for expansion into new provinces, reinforcing the company’s mantra of “Building legacies, Changing lives,” while prioritizing sustainable actions in all decisions.