Calgro M3 in milestone move to JSE Main Board

CEO Ben Pierre Malherbe.

Property developer Calgro M3 Holdings (“CalgroM3”) today transferred its listing from AltX to the JSE Main Board in the ‘Industrials - Construction & Materials’ sector, following a natural progression in the group’s promised turnaround.

The move is the culmination of consecutive periods of healthy results on the back of a strong pipeline of projects starting to break ground.  

CEO Ben Pierre Malherbe says the JSE Main Board is the appropriate platform for growth at this time in the group’s lifecycle.  “CalgroM3 is proving to be a sound investment with constant improvement in shareholder returns.  In light of this, a transfer to the Main Board is now fitting to help broaden our investor base, facilitate access to a wider field of institutional investors and increase liquidity, as well as position us comparably relative to peers.”

JSE CEO Nicky Newton-King says “Calgro M3 has been a heartening AltX success story.  Companies listing, growing and graduating to Main Board was precisely what was envisaged for AltX and we wish Calgro M3 well on the Main Board.”

During 2011 CalgroM3 expanded significantly across the country. In the Western Cape the group advanced its foothold with the R1,3 billion Belhar integrated housing project.  The high density residential component will comprise 3 600 units including social housing, open market rental, GAP and affordable housing as well as student accommodation. Belhar was the second Cape project win for CalgroM3, on the heels of the R554 million Scottsdene project comprising 2 250 units. Malherbe is optimistic about the group’s prospects in the region, with a number of new social and BNG housing projects recently approved by the council.  In the Western Cape, Calgro M3 has commenced with massive bulk and internal civil infrastructure for Scottsdene in January 2012 and expects to commence with the first 350 top-structures early March 2012 

The group is further partnering in in Bloemfontein’s foremost social housing project, Brandwag. “We are in the process of completing Phase 1 (402 units) with construction of the next phase of 495 having commenced during February.”  There are 897 social housing units under construction. 

In Gauteng, the group’s traditional base, the first phases of the Fleurhof, Jabulani Hostel redevelopment project and the Jabulani CBD projects have been successfully completed. On these projects internal services for 4 029 residential opportunities (1 897 Fleurhof, 1 632 Jabulani CBD and 500 Jabulani Hostel), have been provided while 1 496 units have been completed (816 Fleurhof, 180 Jabulani CBD and 500 Jabulani Hostels). An additional 1 778 units are under construction (567 Fleurhof, 1 211 Jabulani CBD).  

The group is also presently involved in a number of smaller projects, including Jukskei View, with more than 500 units under construction in these projects.

Calgro M3 has recently delivered strong performances, more than doubling top and bottom line at their interim results to August 2011. Revenue grew 117% to R209 million while headline earnings rose 372% to R21,7 million despite tough trading conditions in the property and construction sectors.   HEPS increased 372% to 17,03 cents per share while net cash was up 92% from R10,9 million at year-end to R20,9 million.

A good mix of public and private sector work saw margins improve substantially during the interim period. In a November trading statement the group announced that it was anticipating a 175% increase in earnings to 37,07 cents per share. Annual results for the year to 29 February 2012 are expected to be released in May 2012. 

Malherbe says CalgroM3 will continue to realise and grow its pipeline by capitalising on government’s housing commitments and the severe housing backlog in South Africa. “We are currently experiencing a recovery in the local integrated housing sector.  Our delivery to date has established a reputation for reliability and quality and we are well placed to continue securing large-scale projects.” He concludes that: “Just as our proven track record in development and construction gives comfort to our clients, so too should our R8 billion secured pipeline that keeps growing offer investors confidence in the group’s long-term sustainability.”

Calgro M3 shares closed yesterday at R4,08.