JSE-listed Balwin Properties has decided to defer the declaration of a dividend for the financial year ended February 29.

This follows careful consideration of current market conditions and the uncertainty surrounding the continued impact of Covid-19 and its implications on the cash resources of the business, as well as the board's focus on cash management and preservation.

The board will reconsider the declaration of the dividend once there is greater certainty with respect to the implications of Covid-19 on the business.

Meanwhile, revenue for the period was up 11% to R2.91-billion, while profit for the year was down 9% to R411-million.

Earnings a share were down 8% to 88c, while headline earnings a share were also down 8% to 88c.

Net asset value per share was up 11% to 631c.

With regards to the Covid-19 pandemic, Balwin noted its support of government protocols and directives, with the company complying with lockdown restrictions and requesting that all staff work from home, while construction on sites was stopped.

The group has formulated contingency plans with regard to an extended lockdown and the uncertainty regarding when its operation will be able to resume under the current phased lifting of restrictions.

The group has remained in constant communication with key suppliers and contactors to ensure that disruptions in the supply chain are minimised when construction resumes.  

To date, no major disruptions to the supply chain have been identified; however, management is putting in place contingency measures to consider alternatives for key stakeholders within the supply chain.

Expenditure during the lockdown is being actively managed. Management has successfully renegotiated certain contracted payment terms and continues to discuss with funding institutions the postponement of contracted payments where possible.

As a result of the pandemic, there is potential for suppressed economic demand and resulting pressure on market values and selling prices of residential property.

In response, management has performed an assessment of the estimates of net realisable value of the developments under construction. The estimation has been based on the most reliable evidence available at the time and giving due consideration to the implications that may result from the pandemic.

The assessment included consideration of future costs to complete developments as well as the selling prices of the apartments. Management is satisfied that there is sufficient headroom in the value of developments under construction when compared to their cost that no writedown is expected.

Although the full estimate of the implications of the pandemic on the residential property market cannot be made, the negative impact on the economy and the strain on customers could negatively impact the future rate of sales of apartments.

Supported by strong pre-sales and the ability to be responsive to the rate of construction to protect the realisable value of the apartments, no significant reduction in the selling prices of apartments is expected, and the healthy profit margin of the business provides protection against any potential writedown on the realisable value, says the company.