Calgro M3 said that it expected to report a turnaround in the year to February 29, following its restructuring. File Photo: IOL
Calgro M3 said that it expected to report a turnaround in the year to February 29, following its restructuring. File Photo: IOL

Housing group Calgro M3 expects turnaround

By Edward West Time of article published May 13, 2020

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CAPE TOWN - Listed housing and memorial parks group Calgro M3 said yesterday that it expected to report a turnaround in the year to February 29, following its restructuring.

It said in a trading statement that headline earnings per share would be 0.65-2.89 cents per share for the year, representing an increase of 103.2-114.2percent compared to a restated headline loss a share of 20.30c for 2019.

Earnings per share would be 3.70-3.98c, an increase of 46.3-57.3percent compared to the earnings per share of 2.53c for the year ended February 28, 2019.

“Good progress has been made to return the business to profitability and positive cash generation,” the directors said.

Cash generated from operations increased by 55.6percent. Cash balances increased by 108percent to R255.1million as at February 29.

No retail, commercial, project or rental property sales were included in the cash balance referenced above.

The group underwent a major restructuring during the year, the aim of which was to realise an improved risk-based, profitable structure.

This included closing the in-house construction division and the outsourcing of all construction activities going forward. Staff in this division were absorbed into the outsourced partner.

“Much of the liquidity and macro-economic consequences of Covid-19 has been managed through actions taken by the group during the two preceding challenging years. We are proud that we were able to pay full salaries to employees to date, and will endeavour to continue paying full salaries to staff for as long as possible under the lockdown conditions,” the directors said.

Calgro M3 was focusing on the actions and processes required - post the crisis to ensure that business operations returned to full capacity as soon as possible.

The directors said the precise impact Covid-19 had on revenue and profitability was “extremely uncertain”, but the group was well-positioned for growth and would largely be able to absorb the effect of Covid-19 on its performance going forward.

The current cash burn rate is about R14m per month for fixed overheads and interest. In addition to their current cash resources, the group still had its full overdraft of an additional R100m available, it said.

BUSINESS REPORT 

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