Affordable housing developer Calgro M3 will restructure into three business units as part of its roll-out of the R27bn pipeline over the next seven years.
By 2022 the firm would house three separate businesses — housing development, memorial park and rental property — with each contributing a third to the group’s headline earnings, said CEO Wikus Lategan.
Speaking after the release of the financial results for the six months to August, he said headline earnings per share dropped 26.74% to 47.71c, even as revenue rose 40% to R1bn.
Calgro M3’s recently announced rental business had not yet reached capacity, neither had its memorial parks business. The construction of rental units in partnership with SA Corporate Real Estate for the rental business had affected Calgro’s financial performance.
WATCH: Wikus Lategan, CEO of Calgro M3 gives us some insight into the company’s financial performance over the past six months
The first 1,372 units of the phase one project in partnership with SA Corporate were near completion, with hand-over due before the end of February.
The developments business contributed 96% to Calgro M3’s overall profit, Lategan said.
“During the six months, 7,473 houses were under construction and a further 1,057 completed during the period were handed over to our clients. There are about 8,000 additional serviced opportunities available for development across various projects,” he said.
The developments business continued to focus on the private sector but experienced difficult trading conditions. There were delays in capital debt raising, which took longer to conclude than expected due to the challenging economic environment.
Social unrest affected performance with delays in standing time and vandalism being experienced at almost all Gauteng sites.
A construction slowdown in the Western Cape because of the water shortage contributed to the difficulties.
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