Last close As at 05/08/2026
ZAR4.15
▲ 0.05 (1.22%)
Market capitalisation
ZAR470m
Research: Real Estate
Calgro M3’s core business is integrated residential housing development and memorial parks. In the six months to August 2024, the company posted a 28.5% increase in EPS to 101.4 cents, which also represented a three-year EPS compound annual growth rate (CAGR) of 37%. This was supported by a strong gross profit margin of 29.7%, a 383% increase in the share of profits from joint ventures and a 2% decrease in admin costs. Group revenue declined by 26.4% to ZAR507m, compared to H123, but the gross profit margin, which exceeded the target range of 20–25%, offset the decline in revenue. The net asset value (NAV) increased by 6.9% to ZAR14.3 per share, resulting in a price-to-book ratio of 0.5x. Calgro M3’s NAV recorded a three-year CAGR of 26% to August 2024. The company is trading at a historical P/E of 3.9x.
Calgro M3 |
Earnings underpinned by gross profit margin
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Real estate |
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15 October 2024 |
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Calgro M3’s core business is integrated residential housing development and memorial parks. In the six months to August 2024, the company posted a 28.5% increase in EPS to 101.4 cents, which also represented a three-year EPS compound annual growth rate (CAGR) of 37%. This was supported by a strong gross profit margin of 29.7%, a 383% increase in the share of profits from joint ventures and a 2% decrease in admin costs. Group revenue declined by 26.4% to ZAR507m, compared to H123, but the gross profit margin, which exceeded the target range of 20–25%, offset the decline in revenue. The net asset value (NAV) increased by 6.9% to ZAR14.3 per share, resulting in a price-to-book ratio of 0.5x. Calgro M3’s NAV recorded a three-year CAGR of 26% to August 2024. The company is trading at a historical P/E of 3.9x.
Memorial parks gain decent traction
Calgro M3’s residential property development segment posted ZAR475m in revenue, significantly lower than H123 (ZAR669m). The demand for residential units was adversely affected by weak consumer demand and delayed transfers. The number of units handed over dropped by 27% to 869 units. By contrast, the South Hills joint venture posted a revenue increase of 660.8% to ZAR175m, underpinning a 383% jump in the share of profits from joint ventures to ZAR20m. The residential property development segment, which accounted for 93.7% of group revenue, and memorial parks, which contributed 6.3% to group revenue, recorded 27.7% and 57.8% gross profit margins, respectively. Gross profit margins benefited from a higher share of non-public sector units and lower historical land and infrastructure costs. Meanwhile, the memorial parks segment’s revenue increased by 59.0% to ZAR32m. The lay-by option continues to gain traction with an active book of ZAR42m, which will be converted to sales once outstanding amounts are fully settled.
Loan-to-value ratio is low relative to property sector
In H124, Calgro M3’s net debt-to-equity ratio and the debt service coverage ratio were 0.63x and 3.4x, respectively. The company’s borrowing increased marginally to ZAR1bn, from ZAR935m in February 2024 due to the ZAR100m drawdown from the Absa Group facility to prepare for the Bankenveld land transfer. The balance sheet remains strong, with a loan-to-value ratio of 30.4%, which is below the listed property sector average of 40%. Net cash generated from operating activities fell to ZAR28m, from ZAR91m, largely because of finance cost paid. Calgro M3 has ZAR211m of debt maturing at the end of FY25 but ZAR50m was settled in September 2024, according to management.
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Historical financials
Source: Company financial reports. Note: *Basic earnings per share. **Dividends paid at year end (5% of HEPS). |
EDISON QUICKVIEWS ARE NORMALLY ONE-OFF PUBLICATIONS WITH NO COMMITMENT TO WRITING ANY FOLLOW UP. QUICKVIEW NOTES USE CONSENSUS EARNINGS ESTIMATES.
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Research: Financials
In line with earlier guidance, S&U reported H125 PBT of £12.8m, a significant decline versus H124 but an improvement versus H224. Customer repayment collections and earnings in the motor finance business were materially affected by the temporary restrictions agreed with the Financial Conduct Authority (FCA). These have since been lifted, and while regulatory discussions are ongoing, this is an important step towards the strong recovery in motor finance earnings that we forecast. Meanwhile, as previously reported, the property lending division continues to perform strongly, with a positive outlook for continuing growth.