The earnings of the largest sectional title developer in the country, Balwin Properties, continue to be weakened by delays at its major projects.
The company faced delays at four of its developments during the six months to August, it reported on Monday.
These were the Whisken in Kyalami, Green Park in Boksburg, The Blyde in Pretoria, and The Reid in Linbro Park.
The group’s revenue for the six months to August rose 19% but its basic and headline earnings per share fell 5% and its interim profit declined 7%.
Sales volumes also fell but the average selling price rose to more than R1.2m per unit, from R991,551 a year earlier.
CEO Stephen Brookes said the developer’s 10-year pipeline was being rolled out even as the company dealt with challenging economic conditions.
“Demand for our product remains strong and sales are tracking our expectations with 1,015 apartments already pre-sold for the second half of the year,” Brookes said.
“Four developments experienced delays in obtaining certain council approvals and this impacted our performance negatively as fewer developments came to market for sales. Good progress has been made since the period end regarding the approvals and construction is on track,” he said.
But Peter Clark of Investec Asset Management said Balwin’s results suggested its growth was under pressure.
“Sales volumes and margins are trending downwards, which will continue to hamper Balwin’s growth.
“Large development opportunities remain, however the pace will be dictated by demand, which appears to have slowed,” he said.