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Feb 23, 2012

Property developer migrates to JSE main board

Construction|Engineering|Africa|Housing|PROJECT|Projects|Property Development|Rental|Africa|Property Development|Infrastructure
Construction|Engineering|Africa|Housing|PROJECT|Projects|Property Development|Rental|Africa|Property Development|Infrastructure
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Property development group Calgro M3 on Thursday graduated to the main board of the JSE, having listed on the AltX in 2007.

The company is now listed in the ‘Industrials - Construction & Materials’ sector. 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 told Engineering News Online that the timing of the move to the main board coincided with significant growth the company experienced in the previous six months.

“We intend to broaden our investor base with the main-board listing, and do not necessarily need to raise capital,” he said.

Malherbe added that the company needed to keep its growth in check, as taking on too many simultaneous projects would put quality control at risk.

During 2011 Calgro M3 expanded significantly across the country, taking on projects in the Western Cape and the Free State.

Its first Western Cape project was the R554-million Scottsdene development, comprising 2 250 units. Calgro M3 had started with massive bulk and internal civil infrastructure for Scottsdene in January and expected to start with the first 350 top-structures by early March.

The second Western Cape project entailed the R1.3-billion Belhar integrated housing project. The high-density residential component would on completion comprise 3 600 units, including social housing, open market rental, ‘gap’ and affordable housing, as well as student accommodation.

Malherbe was optimistic about the group’s prospects in the region, with a number of projects recently approved by the council.

In the Free State, Calgro M3 was awarded Bloemfontein’s primary social housing project, Brandwag. “We are in the process of completing Phase 1, comprising 402 units, with construction of the next phase of 495 units having started during February,” Malherbe said.

In Gauteng, which was the group’s traditional base, the first phases of the Fleurhof, Jabulani Hostel redevelopment project and the Jabulani CBD projects were completed.

Calgro M3 reported revenue growth of 117%, to R209 million in the six months ended August 31, while headline earnings rose 372%, to R21.7-million, despite tough trading conditions in the property and construction sectors.

A 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 37.07c a share.

The full-year results to February 29 are expected to be released in May.

Malherbe said Calgro M3 would continue to realise and grow its pipeline by capitalising on government’s housing commitments and the severe housing backlog in South Africa.

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
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