Calgro M3 Holdings Limited · JSE:CGR
Calgro M3 — H1 2020 Earnings Presentation
39 slides from Calgro M3's earnings presentation, 2019
Slide 1: Results Presentation
Results Presentation Unaudited interim results for the six months ended 31 August 2019 www.calgrom3.com
Slide 2: Agenda
Agenda 1. Overview of the period | 2. Operations | 3. Financial review 4. Looking forward | 5. Appendix 2
Slide 3: Overview of the Period
1 OVERVIEW OF THE PERIOD
Slide 4: The last six months – Challenges faced
The last six months – Challenges faced ▪ The period under review continued to be negatively impacted by the unstable economic and political landscape with an impact on the Income Statement ▪ Started the six months with a continuation of the previous six months with: – Informal settlement on the Scot
Slide 5: The last six months – It has turned
The last six months – It has turned ▪ Fleurhof substation under construction with estimated completion date in August 2020 ▪ Scottsdene informal settlement dispute resolved and site re-opened ▪ Settled R111 million debt that has matured ▪ Cash on hand increased by 67,5% to R205,4 million ▪ Already c
Slide 6: Other Successes during the period
Other Successes during the period Calgro M3 and the City of Top empowerment award received in Johannesburg won the United recognition of contribution to growth and Nations Sustainable City’s and sustainability Human Settlements award for the South Hills Development Level 1 B-BEE Contributor 6
Slide 7: Other Successes during the period
Other Successes during the period Secured Frankenwald development (current rights of 10,000 residential units with an estimated final yield of between 40,000 and 50,000 residential units after densification) on a 4-year option agreement 7
Slide 8: Our focus during the period under review
Our focus during the period under review Cash flow generation AND Cash preservation ▪ Additional pipeline projects ▪ Closure of various added with no impact on current developments, re-opened after operations and cash flow cashflow was stabilised ▪ Various, transfers, debtor and ▪ Reduced monthly ex
Slide 9: Achievements
Achievements ▪ Fleurhof first 900 units proceeding ▪ Balance of units unlocked None of our developments or completed units are illegally occupied 9
Slide 10: Operational Overview
OPERATIONAL 2 OVERVIEW
Slide 11: Residential Property Developments
Residential Property Developments 11
Slide 12: Residential Property Developments
Residential Property Developments ▪ Total available opportunities excluding Frankenwald – 38,475 or R19bn ▪ Under construction and completed – 3,317 or R1,2bn approximate revenue ▪ 1,000 new units and 2,700 student bed units to commence in January 2020 with R1bn approximate revenue ▪ Further 7,837 s
Slide 13: Residential Property Developments
Residential Property Developments Aug 2019 Subsidised GAP/FLISP Student Mid to high Housing Completed and partially 756 1,136 - 21 completed units – Under construction Partially completed units - 1,204 - - – construction stopped (to recommence) Construction being 401 810 2,700 - recommenced • South
Slide 14: Residential Property Developments
Residential Property Developments ▪ Focused on rolling out current pipeline in the most efficient and effective manner possible ▪ Although our focus is on the private sector, Calgro M3 is well positioned to assist Government with the housing shortfall – Shortfall estimated to be between 5,2 million
Slide 15: Integrated Residential Developments
Integrated Residential Developments Focus: ▪ Continue to trade with caution in current uncertain environment ▪ Cash preservation and management ▪ Increased focus on pipeline roll-out while unlocking value in balance sheet ▪ Balance exposure between client service and project roll-out ▪ Realising fin
Slide 16: Memorial Parks
ell CALGRO M3 Group
Slide 17: Memorial Parks
; =—_—__ Memorial Parks CALGRO M3 Group Current status of provinces Johannesburg City Parks in Johannesburg is encouraging residents to Bloemfontein Only three of the 12 cemeteries in Bloemfontein and Botshabelo consider other options of still have burial space Three of the city’s cemeteries are alr
Slide 18: Memorial Parks
Memorial Parks Sales for the period were under pressure: ▪ Total revenue for the period decreased by 7,3% to R11,0 million (2018: R11,9 million) ▪ Total grave sales declined by 15,4% to 473 graves (Aug 2018: 559 graves) ▪ Extended payment options are also offered to clients (at no interest or additi
Slide 19: Memorial Parks
Memorial Parks ▪ Additional sales agents and sales managers were appointed ▪ New Group Head of Marketing and Sales was seconded to work exclusively on the Memorial Parks business ▪ Total branding overhaul ▪ A major marketing campaign was launched on 15 October 2019 through various mediums 19
Slide 20: Memorial Parks
Memorial Parks Focus: ▪ Target short to medium-term revenue growth of ±100% ▪ Future roll-out of Witpoortjie (16,000 graves), Fleurhof (22,000 graves) and KwaNobuhle (48,000 graves) ▪ National roll-out plan developing rapidly – short to medium term target: ▪ Tshwane ▪ KwaZulu-Natal ▪ Increased marke
Slide 21: Residential Rental Investments
Residential Rental Investments 21
Slide 22: Residential Rental Investments
Residential Rental Investments ▪ The Group is considering the sale of its rental portfolio in the short-term ▪ Growing the Residential Rental business, which is extremely capital intensive, restricts the deployment of available capital in the Residential Property Development business and Memorial Pa
Slide 23: Financial Review
3 FINANCIAL REVIEW
Slide 24: Statement of Cashflows
—S—" Statement of Cashflows CALGRO M3 Group Unaudited Audited August February R’000 2019 2019 Cash generated from/(utilised in) operating activities Cash generated from operations 449 468 298 290 Finance income received 10 377 10 647 Finance cost paid (63 703) (115 459) Tax (paid)/refunded (20 660)
Slide 25: Covenants
Covenants Unaudited Audited six months ended year ended 31 August 2019 28 February 2019 Net debt to equity ratio 1.13 1.09 Covenant 1.5 1.5 Debt service cover ratio (“DSCR”) 2.46 1.47 Covenant 1.2 1.2 25
Slide 26: Statement of Financial Position - Assets
Statement of Financial Position - Assets 26
Slide 27: Statement of Financial Position - Equity and Liabilities
Statement of Financial Position - Equity and Liabilities 27
Slide 28: Borrowings
—S—" Borrowings CALGRO M3 Group Capital Interest Bond repayment payment Bond exchange September 2019 26 608 475 October 2019 5 953 300 November 2019 CGR27 46 000 000 6 839 525 December 2019 3 587 125 January 2020 5 953 300 February 2020 5 561 875 March 2020 26 608 475 April 2020 5 953 300 May 2020 5
Slide 29: Segmental - Statement of Comprehensive Income
Segmental - Statement of Comprehensive Income 29
Slide 30: Statement of Comprehensive Income (continued)
Statement of Comprehensive Income (continued) 30
Slide 31: Looking Forward
4 LOOKING FORWARD
Slide 32: Where we are
Where we are ▪ Completion of Fleurhof substation ▪ Return all projects to capacity - while still retaining risk capital and remaining cautious ▪ Management of debt capital redemption and profile risk – The sale of various commercial and retail stands within our developments - transfer of which is ex
Slide 33: Take away
Take away ▪ The key focus areas for the next six months to 29 February 2020 will be to: – manage liquidity and the downside risks; and – ensuring optimal capital application on projects ▪ Careful consideration is being given to best use of cash on each project to ensure sustainable long-term returns
Slide 34: Thank you
Thank you Wikus Lategan (CEO) Email: wikus@calgrom3.com Waldi Joubert (FD) Email: waldi@calgrom3.com Tel: +27 11 300 7500 www.calgrom3.com Keyter Rech Investor Solutions – Vanessa Rech Tel: 083 307 5600 Email: vrech@kris.co.za
Slide 35: Disclaimer
Disclaimer Calgro M3 has acted in good faith and has made every reasonable effort to ensure the accuracy and completeness of the information contained in this presentation, including all information that may be defined as 'forward-looking statements'. Forward-looking statements may be identified by
Slide 36: Appendix
5 APPENDIX
Slide 37: Business model
. ee Business model CALGRO M3 Group Identify project and due diligence 2 Secure land Township establishment Value is Infrastructi created through a eens Residential turnkey approach Marketing Property to capitals and sales Development and Rental Investments $ ee end user Construction 8 Handover to c
Slide 38: Business model
] Business model Memorial Parks —S—" CALGRO M3 Land identified/ acquisition @ q Landscaping and infrastructure @ development Value is created through operating in strategic locations and @ Marketing and sales providing superior customer service " Holistic burial and remembrance services @ Maintenanc
Slide 39: Value locked-up
Value locked-up Cash generated from operations (post interest of R115m) R 202m Units sold, construction to commence 4 436 / R 1,7 bn (exc VAT) Management valuation (unlock in tangible assets in b/s ex-commercial / retail) R1,4 bn Opportunities Total No. Effective No. Selling price to Total external