Calgro M3 expects a rebound in interim results

Affordable housing and memorial parks developer Calgro M3 said on Thursday it expected earnings for the six months to end-August to increase to more than double, entering a profitable position in the financial year.

The company says its has managed to develop housing units after the hard lockdown eased in 2021, compared with 2020 when it made a loss per share of 30.46c and headline loss per share of 26.29c for the period to end-August 2020.

The company, which builds lower-income residential housing and develops and manages memorial parks, lost about three months of activity in its 2021 year, but activity levels have been improving.

“A further trading statement will be issued in terms of the JSE Listings Requirements when a reasonable degree of certainty exists as to the likely range of the expected increase in earnings per share and headline earnings per share, taking into account uncertainties relating to the final number of registrations and handover of completed units in August 2021,” it said.

Operational performance for the period was in line with expectations communicated in May 2021 at the announcement of the February 28 2021 year-end results.

CEO Wikus Lategan said the group returned to overall profitability, with the majority of the profits generated by its property development business.

Cash collection continued to be healthy and cash balances were strong. “The property development business has returned to profitability, with just over 5,000 units under construction. The most recent unrest in SA did not impact the group, with no units invaded or damaged,” it said.

The memorial parks business continued its growth trajectory, albeit off a low base relative to the property development business, with total cash generated continuing to improve.

Cash generation for the six-month period to end-August 2021 will exceed the total cash generation for the 12-month period to end-February 2020, demonstrating the robust growth that this business is experiencing on the back of a targeted marketing strategy, market visibility, new product development and a superior service quality, Lategan said.

A new entry level product was introduced at Calgro’s Nasrec Memorial Park

The unaudited results for the period to end-August 2021 are expected to be published on October 18 2021.

Calgro, valued at R380m on the JSE, had net debt of R812m at the end of February. Its share price closed 1.85% higher on Thursday at R2.76.

andersona@businesslive.co.za