JSE-listed Calgro M3, the property and property-related investment company specialising in the development of Integrated Residential Housing Developments and the development and management of Memorial Parks, has announced interim results for the period ended 31 August, 2025.
WORDS & PHOTOS: SUPPLIED
Calgro M3’s CEO Ben Pierre Malherbe said, “We have dedicated significant time to rethinking our operations, drawing on decades of experience in residential property development and more recent expertise in memorial parks management. This has enabled us to refine our strategic pillars, focusing capital on future opportunities that optimise the portfolio and reduce debt through a combination of the sale and completion of non-contributing assets and projects.”
He went on to say that buyer sentiment remained cautious for the first half of the year, with signs of a recovering market as evidenced by an improvement in consumer appetite towards the end of July, continuing into August 2025.
Bankenveld District City project
Turning to overall Group performance, revenue decreased during the period as a result of a shift in capital allocation to the Bankenveld District City project, where infrastructure installation has started.
The gross profit margin remained stable at 29.43% (August 2024: 29.57%), driven by cost-saving initiatives and the benefit of historical land costs. This remained above the Group’s target range of 20%-25%.
During the period, 1,327,525 ordinary shares were repurchased at an average price of R5.00 per share, resulting in a reduction in share capital of R6.66 million.
In line with the dividend policy, the Board did not declare an interim dividend.
Operational overview
The Residential Property Development segment accounts for 91.34% of Group revenue. Revenue in the segment decreased by 11.59% during the period, albeit while maintaining a healthy gross profit margin of 27.44%, compared to 27.86% in the previous period.
Malherbe explained that the reduction in revenue is partly attributable to the allocation of resources to the Bankenveld District City development, which will yield in excess of 20,000 opportunities.
“As a result of infrastructure investments made in both the current and previous reporting periods, the Group has sufficient serviced opportunities (2,589) to support demand and sales activity for the upcoming financial year.”
At the February 2025 year-end, the Group held large stock on hand. “We are pleased to have reduced these by more than half in the six months through innovative targeted marketing campaigns and the sale of units to the property investor market. The increase in appetite for this segment of the market demonstrates the inherent value within our developments, with units returning high rental yields. These units are considered well-located, near job opportunities, and offer well-curated lifestyle amenities, including security. Our targeted marketing campaigns and sales to the property investor market have been embedded in the sales strategy,” said Malherbe.
Contributions from the broader residential development pipeline remained well balanced, with construction activities in the Western Cape increasing during the period.
“This aligns with the Group’s strategy to adjust construction activity to diversify provincial exposure. The installation of the final stages of infrastructure in the Belhar project was undertaken, and we completed and sold out a further section of the Scottsdene development. This positions the Western Cape projects to make a large contribution towards performance in the second half of the financial year.”
In Gauteng, on the existing pipeline, the final bulk and link installations in Fleurhof and Jabulani are nearing completion. These, along with bulk and link investments which occurred over the preceding financial years, resulted in 2,589 serviced opportunities being currently available for development across the residential developments pipeline.
Strategic land acquisitions are being assessed in and around areas where bulk and link infrastructure has been installed by the Group, such as Fleurhof, which will assist in lowering future development costs, especially when public sector funding faces constraints.
The Memorial Parks segment delivered another robust set of results, increasing revenue to R39.83 million (August 2024: R36.76 million). Gross profit increased to R20.07 million (August 2024: R19.03 million).
Completed lay-by sales recognised as revenue, increased by 66.23% to R10.89 million (August 2024: R6.55 million), reflecting improved customer conversions, consistent growth in the Memorial Parks segment and the concerted effort to drive predictable future cash flows..
Platinum City Memorial Park
“On-site infrastructure activities have commenced at Platinum City Memorial Park, where final regulatory approvals were obtained during the reporting period. Burials are expected to start in the last quarter of the 2026 financial year, providing the Group with more than 28,000 burial opportunities.”
Malherbe added that once this Memorial Park becomes fully operational, further investments will be directed toward replacing end-of-life parks over the short to medium term to support growth in the segment.
Cash collections for the period of R51.64 million (August 2024: R52.15 million) contributed towards Group overheads..
“The strategic shift in sales strategies we adopted two years ago, to the lay-by market, supports predictability in the cash flows, as evidenced by lay-by cash collections growing to approximately 28% of total cash collections.”
Strategic pillars
Malherbe said that the Group has dedicated significant time to rethinking its operations, drawing on decades of experience in residential property development and more recent expertise in memorial parks management.
“This has enabled us to refine our strategic pillars, focusing capital on future opportunities that optimise the portfolio and reduce debt through the sale and completion of non-contributing assets and projects.”
These include:
- The sale of non-core assets (non-contributing assets with no intention for development in the next five years).
- Balancing the two business segments in the long term by reducing the number of non-contributing projects in the Residential Property Development business and increasing the Memorial Parks business footprint to diversify risk.
- Managing the relationship between the Group’s net debt level in relation to its market capitalisation by delivering on short- to medium-term goals.
- Focusing on enhancing employee expertise through strategic skills development initiatives.
Prospects
Calgro M3 continues to experience strong demand for both residential housing units and burial sites, solidifying its strategic focus on high-demand niches in the South African economy. The reductions in interest rates have shown a positive response, albeit at a slower pace than initially anticipated. Despite the Monetary Policy Committee holding the interest rate at its current level in September, market sentiment shows an uptick, with both increases in home loan volumes and approvals across the market.
“The implementation of our strategic pillars is necessary as the Bankenveld District City development begins and the Group positions to execute on fewer projects with equitable contribution levels. At the same time, the Memorial Parks business has matured, is extremely cash generative, and is poised for further growth. This revitalised strategy has invigorated the entire business, while also ensuring that the business’s debt structure is aligned with its size and capital requirements,” Malherbe concluded.
Access Calgro M3 interim results for the six months, ended 31 August 2025, here.
