Calgro M3 profits dip as it pours capital into Bankenveld District City

JSE-listed property developer Calgro M3 has commenced infrastructure investment at its flagship Bankenveld District City project, marking a shift toward high-demand residential markets while reducing debt.

The group reported headline earnings per share (Heps) of 82.86 cents, down from 100.87 cents a year earlier, after redirecting capital toward the Bankenveld development. Revenue decreased during the period; however, the group maintained a gross profit margin of 29.43%, slightly lower than the 29.57% recorded in August 2024.

Calgro said the Bankenveld District City project, expected to yield more than 20 000 residential opportunities, is central to its next growth phase. Infrastructure work has commenced, with 2 589 serviced stands and 871 residential units under construction.

CEO Ben Pierre Malherbe said the group has “refined its strategic pillars” to focus on completing high-contributing projects and reducing debt through the disposal of non-core assets. Buyer sentiment remained cautious in the first half of the year but improved toward the end of July and August, he added.

The residential property development segment, which accounts for 91.34% of the group’s revenue, experienced a 11.59% decline in revenue during the period, yet maintained a healthy gross profit margin of 27.44%. The decrease was attributed to the redeployment of resources to Bankenveld.

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Calgro also reduced housing stock by more than half, aided by targeted marketing campaigns and higher sales to property investors, a segment the company said demonstrates “inherent value” and “strong rental yields”.

In the Western Cape, construction increased with the completion and sellout of a section of the Scottsdene development and progress at Belhar, which is expected to boost second-half performance. In Gauteng, bulk and link infrastructure at Fleurhof and Jabulani is nearing completion, resulting in 2 589 serviced opportunities currently available for development.

The Memorial Parks business continued to perform strongly, with revenue increasing to R39.83 million from R36.76 million, and gross profit rising to R20.07 million. Completed lay-by sales rose 66.23% to R10.89 million, while cash collections exceeded R50 million for the period.

Calgro also began infrastructure work at Platinum City Memorial Park, which recently received final approvals and is expected to open for burials by the end of the 2026 financial year, providing more than 28 000 burial opportunities.

The group repurchased 1.33 million shares during the period at an average price of R5.00 per share, amounting to R6.66 million, and did not declare an interim dividend.

Malherbe said Calgro remains confident about long-term housing demand, supported by moderating interest rates and rising home loan approvals.

“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,” he said.

Calgro M3 Holdings Ltd. share price

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