Johannesburg - Calgro M3 Holdings, the listed affordable housing company, anticipates further growth into the African market after making its first venture beyond South Africa’s borders into Namibia.

However, the group said yesterday that further growth in the rest of Africa would commence only once it had proved its ability to operate beyond South Africa’s borders through the Otjomuise project in Windhoek. This project, awarded by the National Housing Enterprise of Namibia, comprised the construction of 2 523 residential units and was scheduled to be completed in three-and-a-half years.

Ben Pierre Malherbe, Calgro M3’s chief executive, said the group’s exposure to the subsidised housing sector in South Africa would be diversified through the Namibia contract, adding that in the year to February the group had paved the way for its next growth phase.

“It has grown its project pipeline to over R17 billion, strengthened and consolidated its balance sheet to achieve the cash flow flexibility required in the integrated residential development environment and increased its exposure to public sector clients as a result of government’s drive towards infrastructure development,” he said.

Malherbe said Calgro’s management believed that R10bn of the secured pipeline could be rolled out in the next five to six years.

Calgro yesterday reported 16 percent growth in headline earnings a share to 83.16c in the year to February from 71.84c in the previous year.

Revenue fell by almost 2 percent to R784.9 million from R798.4m. Operating profit dropped 41 percent to R52.85m from R89.37m. Profit after tax increased by 16 percent to R105.69m from R91.3m.

Malherbe said the year under review was exciting but challenging for the group, with accelerated infrastructure investments during the period resulting in margin and cash flow pressure but these investments would facilitate sustained growth over the next 24 months.

He said land for development with a current market value in excess of R1.3bn was carried at a cost of R550m and this excess should flow through as profits over the next few years.

The size of the integrated and affordable market segment, driven by the dire need for housing, would ensure sustained growth in this market segment in future.

Calgro shares rose 2.71 percent to R7.20 yesterday.