Calgro M3’s Fleurhoff housing development on the West Rand. Picture: SUPPLIED
Calgro M3’s Fleurhoff housing development on the West Rand. Picture: SUPPLIED

Housing developer Calgro M3’s share price dropped 51%, its biggest one day drop since listing 13 years ago after the company said its development business had faced delays.

The share price closed at R3.90.

Calgro had a pipeline of 36,686 opportunities, of which 7,326 were completed, while 2,393 were under various stages of construction, but building was halted because of the coronavirus pandemic.

CEO Wikus Lategan said his team had spent two years placing Calgro in its strongest financial position since it listed more than a decade ago.

“We may be operating in a very difficult environment but I can say Calgro is in its strongest financial position in years. We have a lot of liquidity and while our construction business cannot operate in lockdown our memorial parks business has been performing exceptionally,” he said after the release of financial results.

The affordable housing developer reported a 1.3% decline in revenue to R984.1m for the year to February.

As much as 95% of Calgro’s revenue normally comes from its development business and 5% from its memorial parks business. The group develops and services memorial parks.

Headline earnings per share surged 108.7% to 1.77c.

Cash generated from operations rose 55.6% to R464.2m. Net cash generated from operating activities increased 69.9%, enabling the group to settle, on a net basis, R52.7m in financing activities. It also increased its cash balances by 108.0% to R255.1m.

Lategan said Calgro still planned to sell its rental investments in Gauteng and the Western Cape. He said Calgro had R255m in cash which would see it through the economic downturn.

The company said through various cost-cutting and business rightsizing initiatives it had managed to reduce its fixed monthly expenses, enabling it to withstand the challenging economic climate.

Independent analyst Anthony Clark said Calgro’s results narrative had been messy and the company was not presenting a clear strategy to its existing and potential investors.

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