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CALGRO M3 HOLDINGS LIMITED - Calgro M3 venture outside of South Africa to grow existing pipeline

Release Date: 20/02/2014 09:00
Code(s): CGR     PDF:  
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Calgro M3 venture outside of South Africa to grow existing pipeline

Calgro M3 Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2005/027663/06)
Share     code:     CGR                               ISIN:     ZAE000109203
(“Calgro M3” or “the company” or “the Group”)

CALGRO M3 VENTURE OUTSIDE OF SOUTH AFRICA TO GROW EXISTING PIPELINE

Calgro M3 is issuing this voluntary business update to inform its
stakeholders that a project was awarded to the company in Namibia. The
company will therefore expand its operations into Africa to grow its
existing pipeline of secured projects and diversify its exposure to housing
in South Africa.

The R812 million Otjomuise project in Windhoek, awarded by the National
Housing Enterprise (NHE) of Namibia, consists of the construction of 2523
residential units and is programmed for completion in three years and six
months. This project will be the Company’s first venture outside the borders
of South Africa with all construction being subcontracted to a local
contractor in terms of the appointment. With the NHE taking ownership of all
units, and in line with the Company’s South African policy, no construction
will be undertaken on risk. Management is satisfied that project and payment
risk can be controlled and managed in terms of the contract.

The project in Namibia will complement the strong pipeline of existing
projects to be rolled out over the next 5 to 6 years in South Africa.
Construction on the existing R17 billion pipeline of secured projects has
commenced with R15 billion worth of revenue still to be accounted for over
the next 5 to 6 years. Taking development risk into account, management is
of the view that about R 10 billion of the pipeline can be executed over the
next 5 to 6 years. A healthy balance in exposure to the Public and Private
sectors ensures that sufficient flexibility with regards to exposure to
specific segments of the market exists. With construction on six projects in
three different provinces currently contributing to revenue, risk and
exposure to development partners is currently well balanced. Construction on
another four projects will commence during 2014 which will not only
contribute to revenue but will spread risk even further.

The pipeline consists of more than 50 000 residential units, being a
combination of Fully Subsidized, Social housing, GAP FLISP (Finance Linked
Individual Subsidy Programme) and Rental housing, Affordable Housing and a
small portion of exposure aimed at the mid to high segment of the
residential market.

In order to address capacity, the company has appointed an external
contractor to assist with the construction of units in the Western Cape and
structures have been implemented to ensure that quality remains of the
highest standard.



BP Malherbe (Chief executive officer)       WJ Lategan (Financial director)

Johannesburg                                             20 February 2014
Directors:
PF Radebe (Chairperson)*, BP Malherbe (Chief executive officer), WJ Lategan
(Financial director), FJ Steyn, DN Steyn, JB Gibbon*#, H Ntene*, R Patmore*#
,ME Gama*#)
(*Non-executive)
(#Independent)
Registered office: 1st Floor, Cedarwood House, Ballywoods Office Park, 33
Ballyclare Drive, Bryanston 2196. (Private Bag X33, Craighall 2024)
Transfer secretaries: Computershare Investor Services (Pty) Ltd
70 Marshall Street, Johannesburg 2001
(PO Box 61051, Marshalltown 2107)

Sponsor: Grindrod Bank Limited
Auditors: PricewaterhouseCoopers Inc.
www.calgrom3.com

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