Calgro M3 Holdings Limited · JSE:CGR
Calgro M3 — FY2021 Earnings Presentation
42 slides from Calgro M3's earnings presentation, Feb 28, 2021
Slide 1: Results Presentation
Results Presentation For the year ended 28 February 2021 #sustainableactions www.calgrom3.com
Slide 2: Agenda
Agenda 1. Year in perspective 2. Business update 3. Financial review 4. Looking forward 5. Appendix 2
Slide 3: Year in Perspective
1 YEAR IN PERSPECTIVE
Slide 4: Background
Background 2016 - 2018 2019 - 2020: Exacerbated by: ▪ Having to stand ready with what ▪ No power feels like a loaded gun after head- ▪ Land invasions winds of the past three years ▪ Constrained liquidity ▪ Serviced land ▪ High cost structure ▪ Sales ▪ Shortage of back-up cash ▪ Cash to roll this out
Slide 5: #sustainableactions
#sustainableactions Continued implementation to return to profitability Grow market share Ensuring Optimal capital and sales through liquidity and allocation Complete units product reducing debt and increase sales enhancement and across Residential increasing Property footprint of Development Memori
Slide 6: Strategic successes
Strategic successes Disposal of Ruimsig rental portfolio Disposal of non-core Vista Park project Share buy-back Debt restructured Closure of in-house construction division 6
Slide 7: The base is set!
The base is set! NAV increased by 7,2% to Decreased total liabilities by R6,82 per share 15,5% from R1,94 billion to R1,64 billion PAT of R18,5 million Positive cash generated from (2020: R5,3 million) operations of R114,8 million to support #sustainableactions Memorial Parks revenue Liquidity of R5
Slide 8: Dealing with Covid-19
Dealing with Covid-19 Residential Property Development Memorial Parks All construction suspended during lockdown Considered an essential service & (three months' production lost) remained operational throughout the financial year Deeds office closed / operating with skeleton staff, causing delays in
Slide 9: Building legacies and Changing lives
Building legacies and Changing lives Even though retrenchments Made sure all staff were paid in were unavoidable - paid 3x full during lockdown normal salary Fast tracked and shortened Staff were able to work from SMME payments and home and will again if next retentions lockdown materialises Kept th
Slide 10: Purposeful location choices
Purposeful location choices Gauteng accounts for 34,0% and 38,6% of total residential properties in volume and value respectively (Lightstone research 2020) 10
Slide 11: Purpose
=> Purpose CALGRO M3 Group It always seems impossible until it's done. - Nelson Mandela Goalcast
Slide 12: Business Update
2 BUSINESS UPDATE
Slide 13: Integrated Residential Developments
Integrated Residential Developments ▪ Largest contributor to revenue ▪ Three months’ production (construction) loss ▪ Covid-19 effect: ▪ Reduction in revenue from already low base ▪ Standing time costs (R35,8 million) ▪ Closure of construction division, reducing overheads and increased cash flow pre
Slide 14: Integrated Residential Developments: Future focus
Integrated Residential Developments: Future focus ▪ Two provinces ▪ Gauteng ▪ Western Cape ▪ Sale of now non-core projects ▪ Meticulous capital allocation to high-yielding projects ▪ Consistent monthly hand-over of units to enhance stability of cash flows and reduce capital exposure ▪ Lower overhead
Slide 15: Residential Property Developments
Residential Property Developments (Excluding Frankenwald, KwaNobuhle, and Umhlanga Hills) 15
Slide 16: Residential Property Developments
Residential Property Developments 32,590 total available opportunities with 33% in production Under contruction 14% Serviced opportunities 19% Partially / unserviced 67% 16
Slide 17: Memorial Parks
Memorial Parks 17
Slide 18: Memorial Parks
. SS Memorial Parks CALGRO M3 Group es NASREC FOURWAYS MEMORIAL PARK MEMORIAL PARK fen DURBANVILLE ENOKUTHULA MEMORIAL PARK MEMORIAL PARK BLOEMFONTEIN MEMORIAL PARK 18
Slide 19: Memorial Parks
Memorial Parks ▪ Revenue increased by 65,2% ▪ Total cash received increased by 57,0% to R53,6 million (2020: R34,1 million) ▪ Total confirmed Covid-19 sales amounted to R6,9 million ▪ High-quality products in safe and tranquil environment 19
Slide 20: Memorial Parks: Future focus
Memorial Parks: Future focus ▪ Current market share estimated to be 1% in metro areas representing strong potential growth with strong demand ▪ Pipeline of 59,366 burial opportunities ▪ No additional capital required – development to be funded by operations ▪ National roll-out and development of fur
Slide 21: Memorial Parks
Memorial Parks Contribution to cash (FY 2021) Total cash received (inlc VAT) (all products excluding rental income) (Rm) 53.6 21% CAGR 2018 – 2021 53,22% 1% 2% 46% 34.1 28.8 30% 14.9 Nasrec Fourways Enokuthula Bloemfontein Durbanville 2018 FY 2019 FY 2020 FY 2021 FY 21
Slide 22: Financial Review
HPT FINANCIAL REVIEW
Slide 23: Summary of pertinent achievements in the year
Summary of pertinent achievements in the year Financial metric February H1 (August H2 (February Improvement 2021 2020) 2021) on H1 Revenue (R’m) 879,1 395,8 483,3 22,1% Gross profit (R’m) 108,0 31,3 76,7 145,1% Gross profit (%) 12,3% 7,9% 15,9% 101,3% Administrative expenses (87,1) (47,7) (39,4) (17
Slide 24: Statement of Cashflows
Statement of Cashflows 2021 2020 Cash (utilised in)/generated from operating activities Cash generated from operations 114 768 074 464 208 720 Finance income received 7 576 796 14 598 305 Finance cost paid (107 474 196) (117 612 227) Tax (paid)/refunded (17 878 456) (17 817 929) Net cash (utilised i
Slide 25: Statement of Cashflows (continued)
Statement of Cashflows (continued) 2021 2020 Cash flows repaid in financing activities Proceeds from borrowings 396 000 000 145 000 000 Repayment of borrowings (403 000 000) (157 000 000) Loans repaid to joint ventures and associates - (23 000 000) Shares bought back (14 175 000) - Repayment of capi
Slide 26: Covenants
Covenants Audited Audited year ended year ended 28 February 2021 29 February 2020 Net debt to equity ratio 0.99 1.04 Debt service cover ratio (“DSCR”) 1.40 1.93 Date Target By 28 February 2022 0.90:1 By 28 February 2023 0.80:1 By 28 February 2024 0.75:1 26
Slide 27: Segmental revenue contribution
Segmental revenue contribution Revenue Audited Audited year ended year ended 28 February 2021 29 February 2020 Residential Property Development 829 101 989 950 342 471 Memorial Parks 42 451 968 25 692 483 Residential Rental Investments 7 592 628 8 095 532 Total 879 146 585 984 130 486 27
Slide 28: Residential project contributions
Residential project contributions (to Residential Property Development segment) FY 2021 FY 2020 100% 90% 28 379 80% 229 038 88 632 70% 379 496 41 229 60% 183 566 50% 40% 96 103 30% 315 941 107 799 20% 231 378 22 024 10% 55 854 0% Fleurhof Jabulani Witpoortjie South Hills Belhar Third parties 28
Slide 29: Statement of Comprehensive Income
Statement of Comprehensive Income Revenue Audited Audited year ended year ended 28 February 2021 29 February 2020 Revenue 879 146 585 984 130 486 Cost of sales (771 123 301) (883 521 154) Gross profit 108 023 284 100 609 332 Other income 50 630 761 11 314 454 Administrative expenses (87 064 595) (89
Slide 30: Statement of Comprehensive Income (Continued)
Statement of Comprehensive Income (Continued) Revenue Audited Audited year ended year ended 28 February 2021 29 February 2020 Profit after taxation 18 479 441 5 342 794 Profit after taxation attributable to: Equity holders of the Company 18 944 086 4 918 905 Earnings per share – cents 14.88 3.84 Hea
Slide 31: Statement of Financial Position – Assets
Statement of Financial Position – Assets Assets 2021 2020 Non-current assets Investment property 19 947 022 13 833 550 Property, plant and equipment 22 500 654 27 490 484 Intangible assets 159 650 534 159 655 377 Investments 13 027 204 12 269 982 Investments & investment in joint ventures and associ
Slide 32: Statement of Financial Position – Equity and Liabilities
Statement of Financial Position – Equity and Liabilities Equity and Liabilities 2021 2020 Total Equity 828 057 105 815 191 931 Non-current liabilities 208 616 970 219 242 079 Current liabilities Borrowings 944 161 828 1 062 842 931 Current income tax liabilities 92 611 672 463 Trade and other payabl
Slide 33: Borrowing maturities
Borrowing maturities Detail Rand Maturity profile Rand Opening balance 1 March 2020 (gross) 1 069 000 000 FY 2022 107 400 000 New debt 396 000 000 FY 2023 194 800 000 Debt repaid (507 000 000) FY 2024 282 800 000 Closing balance – 28 February 2021 958 000 000 FY 2025 211 750 000 FY 2026 107 500 000
Slide 34: Looking Forward
4 LOOKING FORWARD
Slide 35: What does Calgro M3 have to work with?
What does Calgro M3 have to work with? ▪ Housing shortage remains high ▪ 66,5% housing market in Gauteng and Western Cape ▪ Strong pipeline to capitalise on ▪ Deep, strong market presence ▪ Current grave shortage for next 15 – 20 years ± 8 million ▪ Funeral insurance industry growing in excess of 10
Slide 36: Take away – what lies ahead?
Take away – what lies ahead? ▪ Debt down R119 million in 2020 ▪ Needs to reduce further to meet 0.9:1 target by 2022 ▪ May increase during year though ▪ Conclude sale of Eastern Cape and KwaZulu-Natal land ▪ Sale, transfer and cash in bank of old rental properties and first commercial/retail stands
Slide 37: 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 Available on website: ▪ ESG Report 2021 ▪ Corporate Governance Report 202
Slide 38: 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 39: Appendix
5 APPENDIX
Slide 40: Business model
] Business model Identify project and (4) due diligence @) Secure land Township (3) establishment Top structure planning and design (5) Infrastructure (outsourced) (6) Marketing and sales Transfer to end-user (erven for houses Residential and bulk deals) Property (8) Construction (outsourced) Develo
Slide 41: Business model
. ee Business model CALGRO M3 Group Land identified/ Memorial a acquisition Parks Landscaping and infrastructure development (outsourced) Value is created through operating in strategic locations and providing superior products and customer service Marketing e and sales e Holistic burial and remembr
Slide 42: Board composition
] Board composition a Board composition @ Executive Non-Executive @ ® 6 Directors Director CHD @ wrsam Q me a 4) Checions Chairperson Lead | Me Qs" & Gender CALGRO M3 Group Race ww Black Indian l | i: I Write Tenure Otolyear 1ioSyeas Sto 1Oyears 10+ years | l l | Average: 6 years