Calgro M3 Holdings Limited · JSE:CGR
Calgro M3 — H1 2019 Earnings Presentation
42 slides from Calgro M3's earnings presentation, 2018
Slide 1: Results Presentation
Results Presentation Unaudited interim results for the six months ended 31 August 2018 www.calgrom3.com
Slide 2: Agenda
Agenda Difficulties experienced Calgro M3 is a property and property related Operational overview investment company Financial review – IFRS 15 implications that is a market leader in the Looking forward development of Residential Developments, Residential Rental Appendix Investments as we
Slide 3: Difficulties experienced
1 Difficulties experienced |
Slide 4: 2019 theme
2019 theme: Maturing our current businesses to deliver consistent results which enable and support the Group to diversify further. We will be defined by how well we adapt and embrace the ever-changing needs of the people we serve.
Slide 5: 25 March 2018
25 March 2018 =
Slide 6: April to August 2018
April to August 2018 Lh | SP ag. iy fa ‘
Slide 7: Most difficult conditions ever experienced
Most difficult conditions ever experienced • Economic conditions • Illegal occupations • Fleurhof electrification • IFRS 15 • Drought • Cancellation of executive share scheme 7
Slide 8: Please note
Please note Neither IFRS 15 nor the current short-term challenges in the operating environment, have a long-term impact on underlying fundamentals Management’s assessment (conservative) of the net tangible asset value of R3,6bn – has not changed 8
Slide 9: Operational overview
2 OPERATIONAL OVERVIEW
Slide 10: Calgro M3 Village concept - South Hills
Calgro M3 Village concept - South Hills 10
Slide 11: Typical Integrated Development
Typical Integrated Development 11
Slide 12: Integrated Developments
Integrated Developments Units under construction as at 3 377 (Feb 2018: 5 141) 31 August 2018 Handed over to customers 1 843 (Feb 2018: 3 426) Serviced opportunities Supports strong >9 500 (Feb 2018: 9 000) completed and in progress pipeline Units sold – construction to 3 013 (Feb 2018:3 500) commen
Slide 13: Integrated Developments
Integrated Developments Variable cost model tested – Implementation more difficult than expected – … and costlier – Lessons learnt Commenced with new project management system roll-out Illegal occupants and informal dwellers mostly successfully relocated Commenced with bulk infrastructure on
Slide 14: Integrated Developments – Electrification
Integrated Developments Business specific challenges: Economic and political uncertainty Consumer spending power Public sector spend Uncertainty surrounding land expropriation Community unrest Electrification “One of the first JSE-listed companies to address the water shortage in the Wes
Slide 15: Our market
Our market Housing shortfall persists Consumer under financial pressure – House Price Index disappoints at 4,7% year-to-date – Purchase activity turnover down to 2,7% – Inflation Concerns of potential interest rate increases Consumer sentiment Despite the desperate need for housing close to
Slide 16: Brand awareness
Brand awareness Continued the shift to digital marketing 16
Slide 17: Residential Rental Investments
Residential Rental Investments 17
Slide 18: Residential Rental Investments
Residential Rental Investments 696 units handed over to Consortium Take-up of units steadily increasing 40 of 480 units from external developer handed over Business specific challenges: Slow rental take-up Remaining on the forefront of innovation in the market we serve Geographically div
Slide 19: Memorial Parks
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Slide 20: Memorial Parks
Memorial Parks 649 grave and niche sales - average price R20 662 compared to 947 for the full previous year - average price of R15 733 347 installment sales not accounted for in revenue Target to grow sales a further 80% to 100% in next six-months 133 327 burial sites available National ro
Slide 21: Brand awareness
Brand awareness Continued focussing on brand awareness through social media All Memorial Parks have Instagram pages to encourage users to tag our parks while visiting – leading to indirect marketing 21
Slide 22: Brand awareness
Brand awareness An updated and more simplistic look and feel was created for the Memorial Parks brand, focusing on the individual beauty of each of our parks 22
Slide 23: Making a difference – education, schooling and some fun
Making a difference – education, schooling and some fun 23
Slide 24: Financial review
3 FINANCIAL REVIEW
Slide 25: IFRS 15 – Revenue from contracts with customers
IFRS 15 – Revenue from contracts with customers – 1 March 2018 The calculated increase/(decrease) on the Group’s opening financial information is as follows: R’000 Investment in joint ventures and associates (R17 225) Deferred income tax asset R2 042 Construction contracts (R416 443) Retained income
Slide 26: Statement of Comprehensive Income
Statement of Comprehensive Income 26
Slide 27: Unrealised profit impact
Unrealised profit impact R’000 27
Slide 28: Statement of Comprehensive Income analysis
Statement of Comprehensive Income analysis R’000 28
Slide 29: Statement of Financial Position
Statement of Financial Position
Slide 30: Financial position – Equity and Liabilities
Financial position – Equity and Liabilities 30
Slide 31: Statement of Cashflows
Statement of Cashflows R’000
Slide 32: Covenants
Covenants Unaudited six Audited year months ended 31 August 2018 28 February 2018 Net debt to equity ratio 1.16 0.75 Covenant 1.5 1.5 Debt service cover ratio (“DSCR”) 1.84 1.57 Covenant 1.2 1.2 32
Slide 33: Looking forward
4 Looking forward
Slide 34: Operational prospects
Operational prospects - Roll-out of existing pipeline Well positioned to Residential - Capitalising on private sector sales drive assist Govt Property eradicate housing Developments - Enhancing product offering backlog - Improving efficiencies - New 12 month interest and fee free repayment plan to D
Slide 35: Areas of focus
Areas of focus Fleurhof construction recommenced on certain phases Scottsdene recommenced, but conditions remain tense – Two blocks to be completed for hand over mid-November after the site was closed since Easter weekend Insurance claims to be finalised Cautious of capital liquidity – Repai
Slide 36: What does the future hold?
What does the future hold? Delayed effect due to current challenges Continue to drive strategy of ensuring diversified sources of revenue and profits – Improve operating profit mix – Annuity income – Operating expenses to be funded from other businesses rather than lumpy development cashflow – m
Slide 37: Making a difference
. . ——— ] Making a difference CALGRO M3 Group the world and make it a better place. It is in our We can change 6 your hands to make a difference. -Nelson Mandela- 37
Slide 38: A typical Calgro M3 Home
. a ] A typical Calgro M3 Home CALGRO M3 Group er A 38
Slide 39: A typical Calgro M3 apartment
A typical Calgro M3 apartment 39
Slide 40: Take away
Take away Calgro M3 Group Build a base of diversity within theme of property development Geographic expansion Mixed product offerings remains strategic advantage Government spend will return in the medium to long-term Critical housing shortfall requires quality products Working capital and capital a
Slide 41: 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 42: 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