To view the PDF file, sign up for a MySharenet subscription.

CGR - Calgro M3 Holdings Limited - Unaudited interim results for the six

Release Date: 17/10/2011 08:00
Code(s): CGR
Wrap Text

CGR - Calgro M3 Holdings Limited - Unaudited interim results for the six months ended 31 August 2011 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") UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2011 HIGHLIGHTS * Revenue up 117% from R96.2 million to R209.0 million; * HEPS up 372% from 3.61 cents per share to 17.03 cents per share; and * Net cash and cash equivalents up 92% from R10.9 (February 2011) million to R20.9 million; and * Current pipeline of projects in excess of R5 billion. CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Unaudited Unaudited
Six Months Six Months 31 August 31 August R`000 2011 2010 Revenue 208 987 96 171 Cost of sales (173 911) (76 267) Gross profit 35 076 19 904 Net administrative expenses (17 887) (13 879) Operating profit/(loss) 17 189 6 025 Net finance cost 386 299 Share of profit/(loss) of associates/ 9 390 _ Joint ventures(Nett of tax) Profit before taxation 26 965 6 323 Taxation (5 315) (1 736) Profit after taxation 21 650 4 587 Attributable to: Equity holders of the company 21 650 4 587 Earnings per share - cents 17.03 3.61 Headline earnings per share - cents 17.03 3.61 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION Unaudited Audited
Six Months Year 31 August 28 Feb R`000 2011 2011 ASSETS Non-current assets Property, plant and equipment 3 822 4 765 Loans to associates 11 790 10 994 Other non-current assets 77 200 63 397 92 812 82 156 Current assets Inventories 241 127 234 945 Construction contracts 70 482 40 646 Trade and other receivables 19 757 14 601 Other current assets 6 397 6 120 Cash and cash equivalents 25 524 14 954 363 287 311 266
Total assets 456 099 393 422 EQUITY AND LIABILITIES Equity Capital and reserves 192 323 170 674 Total equity 192 323 170 674 Non-current liabilities Other non-current liabilities 16 831 13 176 16 831 13 176
Current liabilities Current borrowings 157 259 154 262 Other current liabilities 85 018 51 269 Bank overdraft 4 668 4 041 246 945 209 572 Total equity and liabilities 456 099 393 422 Net asset value per share - cents 151.32 134.28 EARNINGS RECONCILIATION Unaudited Unaudited Six Month Six Months 31 August 31 August R`000 2011 2010 Determination of headline earnings Attributable profit 21 650 4 587 Headline earnings 21 650 4 587 Determination of diluted earnings Attributable profit 21 650 4 587 Diluted earnings 21 650 4 587 Number of ordinary shares (`000) 127 100 127 100 Weighted average shares (`000) 127 100 127 100 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW Unaudited Unaudited Six Months Six Months 31 August 31 August
R`000 2011 2010 Net cash from operating activities 8 639 31 284 Net cash from investing activities (1 079) (12 897) Net cash from financing activities 2 383 (17 365) Net (decrease)/increase in cash and cash equivalents and bank overdraft 9 943 1 022 Cash and cash equivalents and bank overdraft at the beginning of the year 10 913 (11 203) Cash and cash equivalents and bank overdraft at the end of the year 20 856 (10 181) CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share Share Retained Total
Capital premium income equity (Figures in Rands) Balance at 1 March 2010 1 271 96 020 450 57 696 796 153 718 517
Total comprehensive income for Year ended 31 August 2010 4 587 329 4 587 329 Balance at 31 August 2010 1 271 96 020 450 62 284 125 158 305 846
Balance at 1 March 2011 1 271 96 020 450 74 652 237 170 673 958 Total comprehensive income for Year ended 31 August 2011 21 649 354 21 649 354 Balance at 31 August 2011 1 271 96 020 450 96 301 591 192 323 312 CONDENSED SEGMENT REPORT FOR THE GROUP R`000 Land Professional Inter Group Total Figures in rands Construction Development Services Holding Aug 2011 Revenue 204 791 1 899 2 297 208 987 Operating (loss)/profit 15 670 (2 032) 2 077 1 474 17 189 Aug 2010 Revenue 60 792 33 539 1 840 96 171 Operating (loss)/profit 5 653 (666) 1 577 (539) 6 025 August 2011 Total assets 118 041 221 051 5 187 111 820 456 099 Total Liabilities (68 130) (89 129) (106 516) (263 775) Feb 2011 Total assets 88 341 214 734 - 90 347 393 422 Total Liabilities (53 638) (91 893) - (77 217) (222 748) COMMENTARY The directors present the condensed consolidated interim financial results for the six months ended 31 August 2011 ("the period"), which reflects a substantial improvement in a number of key financial indicators (the most noteworthy being increases in revenue, HEPS and net cash and cash equivalents), despite the challenging trading conditions in the construction and property development sectors. A strong project pipeline, supported by healthy relationships with clients, financiers and suppliers again enabled the Group to deliver top and bottom line growth. FINANCIAL RESULTS Group revenue increased by 117% to R209 million (Aug 2010: R96 million) and headline earnings rose 372% to R21,7 million (Aug 2010: R4,6 million). The growth is directly attributable to the pipeline of projects, as announced in April 2011, beginning to translate to profit. Four major projects are running concurrently, with others expected to commence during the second half of the 2012 financial year. Net administration expenses rose by 28.9% to accommodate the increase in revenue. The Group`s delivery is defined and controlled by capacity, therefore as demand grows, inevitably capacity growth will also follow. Fixed cost increases for the period related to the appointment of a divisional director for the recently opened Cape Town office and a divisional director responsible for Group Procurement. Net cash on hand again grew, to a positive R20.9 million (Feb 2011: R10, 9 million). The Group continues to monitor debt levels and gearing has stabilised at 70%, which allows it to increase over the next 5 years in proportion to working capital demands. The statement of financial position (balance sheet) is appropriately structured for future growth. For the period, total assets increased by 16% to R456 million (Feb 2011: R393 million). OPERATIONAL REVIEW Ongoing delays in infrastructure spend by government continues to impact on integrated housing and the Group was not excluded from this trend. However, the Group has limited the risks by accelerating the privately financed composition of its integrated developments. Government`s roll-out of 80 000 Social Housing units filled the gap left by non delivery in the Fully Subsidised segment. In line with the Group`s strategy, no external contractors have been appointed and all construction is currently run in-house to ensure that the highest level of quality is maintained. With benchmarks set by management in terms of quality and pricing, the Group is set to look externally for capacity to complete the five year pipeline of projects. The infrastructure for the first phase of the Fleurhof project (Exts 2, 3, 4 and 6) is nearing completion thus integrating the development into the surrounding area. Construction of residential units aimed at the Fully Subsidised, Social, Rental and GAP markets is well underway with 480 units completed to date and more than 550 additional units under construction. The installation of infrastructure for the first phases of both Jabulani CBD and Jabulani Hostel projects is on track for completion in the next six months. Construction of 500 units in the Hostel re-development project is nearing completion and handover is scheduled for later in 2011. Construction of 325 units in the CBD project has commenced and this will be significantly increased to over 800 units in the next financial year to fulfil contractual obligations. The recovery of the Affordable Housing sector continued to grow during the period, with end-user finance becoming ever more readily available as more financial institutions offer 100% bonds to entry-level consumers. Marketing of the units in the Jukskei View project will ensure that the project will conclude in line within expected completion dates. Construction of the first phase of 264 units on the Brandwag project in Bloemfontein is nearing completion. The second phase of the project has commenced. The number of units under construction will increase to an additional 495 units. This Brandwag project marks the Group`s first venture outside its traditional Gauteng base. The expected improvement in the Mid-to-High income Housing sector has not occurred as was expected; the units under construction in this sector did not significantly contribute to Group results. All development rights are in place and the Group will continue to "landbank" these properties. HEALTH & SAFETY The group has maintained its exceptional safety record and was again fatality and serious injuries free in the workplace. This reflects the Group`s commitment to sustaining its target level of zero harm. PROSPECTS Government`s undertaking to deliver on Social Housing is an opportunity for the Group. Sales of these units to Social Housing institutions were noticeably higher during the period in comparison to the period in 2010. This increased exposure is proving an effective risk mitigator as it dilutes dependency on Fully Subsidised units. Recent published guidelines such as the ABSA House Price Index and Residential Property Perspective, the Standard Bank Residential Property Gauge, and the FNB Property Barometer, are making it easier to analyse the affordable housing sector. Standard Bank`s December 2010 edition has an excellent section on Soweto, suggesting that there is indeed data to analyse enabling the banks to determine the risks of lending into the `affordable` market. For policy makers as well as product providers such as Calgro M3, the information regarding the low income housing sector is a major tool to effectively plan and execute projects. The affordable & GAP housing market makes up 58% of all registered residential properties in the Deeds Registry, when including the government subsidized housing sector (this property market services 88% of South African households). With end-user finance becoming more readily available and the fact that banks exceeded the charter lending targets in the five years to end- 2008 and have since continued to generate home loans to the tune of R4bn/year to the gap market shows that they are more than willing to lend to lower- income households. According to the Banking Association, the greater problem is that there`s very little stock available in this GAP market. Calgro M3 is ideally poised to make stock available for this market segment. Calgro M3 sees extensive opportunity in the provision of quality housing for the integrated and GAP housing market segments, with a shift in focus to Social and Rental units within these segments. The above prospects statements have not been reviewed or reported on by the company`s auditors. EVENTS AFTER 31 AUGUST 2011 The recent award to the Group of the Scottsdene development in the Western Cape, with mayoral and city council approval for commencement marks a further extension of the Group`s geographical expansion. The Group has opened a new regional office under a divisional director, which will create an ideal springboard for further expansion into the Western Cape. The four-year R554 million Scottsdene development is a fully integrated housing project comprising 2200 GAP, Social Housing, Rental Housing, Community Residential Units ("CRUs"), fully subsidised RDP/BNG units and freehold Affordable Housing units. The expected completion date of the project is towards the end of 2015. APPRECIATION Our management and their teams have been instrumental in enabling the Group to continue its turnaround as promised, and to achieve these results. We thank them and look forward to continuing on this successful path. We also thank our partners, clients and shareholders for maintaining confidence in us, which we trust our achievements will continue to support. Notes 1. Basis of preparation These consolidated condensed financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) on Interim Financial Reporting (IAS34), the South African Companies Act and the Listings Requirements of the JSE Limited. The accounting policies are consistent with those used in the annual financial statements for the year ended 28 February 2011. 2. Independent audit These consolidated condensed interim financial statements have not been reviewed. 3. Dividends No dividends have been declared for the period. BP Malherbe (Chief executive officer) WJ Lategan (Financial Director) Johannesburg 17 October 2011 Directors: PF Radebe (Chairperson) *, BP Malherbe (Chief executive officer), WJ Lategan (Financial Director), FJ Steyn, DN Steyn, JB Gibbon*#, H Ntene*, R Patmore*#, RN Wesselo*. (*Non-executive) (# Independent) Registered office: 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) Designated advisor: Grindrod Bank Limited Auditors: PricewaterhouseCoopers Inc. www.calgrom3.com Date: 17/10/2011 08:00:17 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

Share This Story