Calgro M3 Holdings Limited · JSE:CGR
Calgro M3 — FY2016 Earnings Presentation
56 slides from Calgro M3's earnings presentation, May 2016
Slide 1: Results Presentation
Results Presentation Final Results for the Year Ended 29 Feb 2016 May 2016
Slide 2: Agenda
Agenda • Introduction and Highlights • Business Model • Financial Review • Operational Review • Risks • Market Trends • Prospects
Slide 3: Introduction and Highlights
INTRODUCTION AND HIGHLIGHTS
Slide 4: Calgro M3 Introduction
Calgro M3 Introduction Calgro M3 – what do we do? • Property developer • Primary focus on lower end of residential market and private memorial parks Specifically integrated projects To assist South Africa mend traditional social structures • And have o In-house professional services o In-house m
Slide 5: Highlights
Highlights Financial highlights Operating Profit Waterfall EPS Profit after tax 91.2% to 33.3% to 32.7% to R160.2 m 152.77 cps R193.2 m Key ratios Gross profit Return on Net Return on Equity margin Tangible Assets 32.5% 20.89% 29.2% Cash flow and debt Net Debt/Equity No dividend ratio payment 0.59 v
Slide 6: Products: Property Development
Products: Property Development
Slide 7: Typical Calgro M3 Integrated Development
Project Portfolio TYPICAL CALGRO M3 INTEGRATED DEVELOPMENT
Slide 8: Calgro M3 Integrated Development
Calgro M3 Integrated Development Fleurhof, Johannesburg, Gauteng
Slide 9: Calgro M3 Integrated Development
Calgro M3 Integrated Development Fleurhof, Johannesburg, Gauteng
Slide 10: Calgro M3 Integrated Development
Calgro M3 Integrated Development Fleurhof, Johannesburg, Gauteng
Slide 11: Calgro M3 Integrated Development
Calgro M3 Integrated Development Fleurhof, Johannesburg, Gauteng
Slide 12: Calgro M3 Integrated Development
Calgro M3 Integrated Development Fleurhof, Johannesburg, Gauteng
Slide 13: Calgro M3 Integrated Development
Calgro M3 Integrated Development Fleurhof, Johannesburg, Gauteng
Slide 14: Calgro M3 Integrated Development
Calgro M3 Integrated Development Jabulani Hostels re-development, Soweto, Gauteng
Slide 15: Calgro M3 Integrated Development
Calgro M3 Integrated Development South Hills, Johannesburg, Gauteng
Slide 16: Calgro M3 Integrated Development
Calgro M3 Integrated Development Scottsdene, Cape Town, Western Cape
Slide 17: Calgro M3 Integrated Development
Calgro M3 Integrated Development Belhar, Cape Town, Western Cape
Slide 18: Calgro M3 Integrated Development
Calgro M3 Integrated Development Jabulani CBD Development Scottsdene Development
Slide 19: Affordable Housing Development
Affordable Housing Development Summerset Development, Midrand, Gauteng
Slide 20: Retirement & Lifestyle Estate
Retirement & Lifestyle Estate La Vie Nouvelle Retirement & Lifestyle Estate, Broadacres, Gauteng
Slide 21: Calgro M3 Mid-to-High
Calgro M3 Mid-to-High Mid-to-High Market Segment
Slide 22: Project Portfolio
Project Portfolio
Slide 23: Products: Memorial Parks
Products: Memorial Parks Focus on family burials, replacing the traditional family grave yards Direct pre-death sales (opportunity for families to purchase family burial areas) Post-death sales R25 000 Enhancements include burial sites positioned in circles where loved-ones can be remembered and vis
Slide 24: Calgro M3 Memorial Parks
Calgro M3 Memorial Parks Nasrec Private Memorial Park, Johannesburg, Gauteng
Slide 25: Calgro M3 Memorial Parks
Calgro M3 Memorial Parks Nasrec Private Memorial Park, Johannesburg, Gauteng
Slide 26: Calgro M3 Memorial Parks
Calgro M3 Memorial Parks Nasrec Private Memorial Park, Johannesburg, Gauteng
Slide 27: Product Integration
Product Integration Segment: Contribution to revenue: Property Development 98.3% Professional Services 1.7% Growth area Memorial Parks 0.1%
Slide 28: Business Model
a y _ oh. ge i BUSINESS MODEL
Slide 29: Business Model
Business Model Secure land Township establishment Identify project design, & Due diligence oth Determine target market, environmental studies, funding requirements, CALGRO M3 iohasacre Turnkey Approach ' Handover to clients an shipriority Marketing & Sales Marketing of esidential units and Construct
Slide 30: Project Pipeline Growth
Project Pipeline Growth 2015 2016 R19bn R27bn Attributable to: • Fleurhof (Joburg) +220 units • South Hills (Joburg) +877 units • Tanganani Ext 14 (Joburg North) +1,889 units • Leratong (Mogale City) +12,000 units • La Vie Nouvelle (Joburg North) +38 units • Scottsdene (Cape Town) + 12 units • Memor
Slide 31: A solid pipeline to support sustainability of Calgro M3
A solid pipeline in place to support the sustainability of Calgro M3 Project Pipeline
Slide 32: National Footprint: Residential Units
National Footprint Gauteng Fleurhof 10 411 units South Hills 6 204 units Jabulani CBD 3 870 units Witpoortjie 3 117 units La Vie Nouvelle 330 units Residential Units Summerset Place 280 units Jabulani Hostels 663 units Tanganani Ext 14 8 822 units Leratong Namibia Western Cape Free State Eastern Cap
Slide 33: Financial Review
FINANCIAL REVIEW
Slide 34: Non-standard Transactions
Non-standard Transactions Purchase remaining 30% Share scheme restructure of Fleurhof • R243 million • Settlement of old cash • Unlock synergies settled SAR • All income accrues to • Executive share scheme Calgro M3 (not to JV partners)
Slide 35: Share Scheme's
Share Scheme’s R’000 Summary of Future Expenses 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY Previous SAR 966 924 924 416 - - (variable) Executive 26 682 26 682 23 392 21 199 18 204 7 185 Scheme (fixed) SAR 12 190 4 579 3 385 - - - Settlement (fixed) Total 39 838 32 185 27 701 21 615 18 204 7 185
Slide 36: Comprehensive Income
Comprehensive Income R’000 Change % Audited Audited Year-ended Year-ended 29 Feb 2016 29 Feb 2015 Revenue 29.2 1 204 064 932 205 Cost of sales 25.8 (952 571) (757 334) Gross profit 43.8 251 547 174 871 Gross profit margin 20.89% 18.76% Other income 128.5 19 466 8 521 Admin and other expenses 11.3 (1
Slide 37: 5 Year Performance
5 Year Performance Revenue (R'm) Operating Profit (R'm) 1204 160 932 798 784 89 83 514 52 43 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Basic EPS (Cents) NAV per share (Cents) 645.00 152.77 114.65 455.30 83.16 340.72 71.84 257.56 51.44 185.72 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
Slide 38: Financial Position
Financial Position Audited Audited Year-ended Year-ended R’000 Change % 29 Feb 2016 29 Feb 2015 Non-Current assets Other 17 615 21 323 Intangible assets 159 039 40 971 Investment in joint ventures and associates 6 080 229 567 -37.39% 182 734 291 861 Current assets Other 110 043 171 203 Inventories 4
Slide 39: Cash Flow
Cash Flow R’000 Change % Audited Audited Year- Year-ended ended 29 Feb 2015 29 Feb 2016 Net cash generated from operating activities (55.1) 35 511 79 177 Net cash utilised in investing activities +440 (140 533) (25 576) Net cash from financing activities +287 54 528 14 072 Net cash in cash and cash
Slide 40: Cash Flow Utilisation
Cash Flow Utilisation Rm Transfer 300+ to end Cost recover user 200 Hand over of unit to client 150 9 100 Zero costs Marketing & Land 1 Township 4 identification Development Sales 6 Transfer 7 Due Diligence2 Land 3 Cost outlay Acquisition Infrastructure 50 5 100 Construction of top structures 8 150
Slide 41: Capital Expenditure
Capital Expenditure Capital Management Total Investments Cash generated from operations La Vie Nouvelle Witpoortjie R21,3m R27,8m rr CALGRO M3 Building legacies, changing lives Memorial Parks R39,8
Slide 42: Operational Review
a 3 > a ge i 27 OPERATIONAL REVIEW
Slide 43: Residential Developments
Residential Developments • Fleurhof remains flagship project • Jabulani Hostels Redevelopment will contribute more positively during year ahead • Infrastructure installation completed at Witpoortjie, South Hills, Summerset and La Vie Nouvelle in 2016 o Revenue and cash flow contributions expected in
Slide 44: Contribution From Pipeline
Contribution From Pipeline By number of units 1% 22% 28% 28% 21% BNG Housing CRU & Social Housing GAP, FLISP, Rental & Student Housing Affordable Housing
Slide 45: Contribution From Pipeline
Contribution From Pipeline By revenue 2% 5% 14% 30% 19% 29% BNG Housing CRU & Social Housing GAP, FLISP, Rental & Student Housing Affordable Housing Mid-to-High Memorial Parks
Slide 46: Professional Services
Professional Services • Includes various in-house services consisting of identifying projects, due diligence, securing land, township establishment and town planning • Adds and enhances value in turnkey business model • Architectural department added during 2016
Slide 47: Memorial Parks
Memorial Parks • Calgro M3 remains committed to current market segment • Focused marketing efforts in place • Sales increasing
Slide 48: Challenges and Risks
CHALLENGES AND RISKS
Slide 49: Challenges and Risks
Challenges and Risks • Macro environment and impact on projects • BEE Compliance • Exposure to Government • Retention of staff • Cash flow, uncontrolled growth and capacity • Reputational damage due to sub-standard workmanship
Slide 50: Markets
MARKETS
Slide 51: Market and South African Politics
Market and South African Politics Questions on every ones lips: • Exposure to Government • Effect of interest rate hikes • Effect of depreciating currency • Increased competition • Possible saving on supplies due to increased competition • Effect of general economy down turn • Political environment
Slide 52: Prospects
~ a PROSPECTS
Slide 53: Our Drivers and Focus
Our Drivers and Focus Residential Developments • Increased focus on diversification between o Contributing projects o Provinces o Paymasters • Increased market penetration across all markets Memorial Parks • Creating a brand • Building relationships with all role players in sector • Enhancing insura
Slide 54: Take Away
Take Away • Solid strategy and in-depth industry knowledge • Understanding of Government and how to interact with this strategic stakeholder • Barriers to entry for mega and catalytic projects is high • Established excellent reputation in the industry • Flexibility to move between markets as economi
Slide 55: Investor Relations Contacts
Investor Relations Contacts Ben Pierre Malherbe E-mail: benpierre@calgrom3.com Wikus Lategan E-mail: wikus@calgrom3.com Waldi Joubert E-mail: waldi@calgrom3.com Tel: +27 11 300 7500 www.calgrom3.com Keyter Rech Investor Solutions – Vanessa Rech Tel: 083-307-5600 Vrech@kris.co.za
Slide 56: 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