CAPE TOWN - The share price of Calgro M3, which invests in Integrated residential developments, rentals and memorial parks, increased up to 8.6 percent yesterday to R4.30 in spite of headline earnings a share sliding 204.2 percent to a loss of 3.24 cents for the six months to August 31.
CEO Wikus Lategan said it had been a frustrating six months, but two problematic contracts had “at long last” been resolved, with construction underway, and sufficient cash resources of R445 million had been generated for group operational sustainability and to manage risks.
“We have continued to generate positive cash flow in the past 12 months, and in time the income statement will follow. We anticipate a stable, if slightly better performance in the second half,” he said in a telephone interview.
“We said six months ago it was going to take time, effort and money to resolve these contracts,” he said, adding that he was feeling “a lot more comfortable,” at this point.
Work at Fleurhof substation was underway after initially experiencing electricity shortages. The illegal invasion of Scottsdene was being resolved and no other Calgro M3 units were currently illegally occupied.
“During the difficult economy, we stabilised cash flow through various debtor and progress draw recoveries, which enabled us to support ourselves without having to sell off any of our assets outside of the ordinary course of business,” he said,
A decision was also taken to suspend work on various developments, which resulted in additional costs and lower gross profit.
“We believe these decisions will ensure overall sustainability and mitigate any risks associated with unplanned delays and stoppages on major projects,” said Lategan.
During the period, a Sustainable City and Human Settlements Award had been received from the UN; and the Frankenwald development had been secured.
The Frankenwald property, secured in equal partnership with another developer, is the last large-scale property in the greater Sandton area and is situated next to Alexandra and the Marlboro Gautrain station.