Calgro M3 Holdings Limited · JSE:CGR
Calgro M3 — FY2023 Earnings Presentation
40 slides from Calgro M3's earnings presentation, May 2023
Slide 1: Annual Financial Results for the year ended 28 February 2023
ANNUAL FINANCIAL RESULTS for the year ended 28 February 2023 www.calgrom3.com
Slide 2: Agenda
AGENDA 1 2 3 4 5 6 YEAR UNDERLYING FINANCIAL SHAREHOLDING THE FUTURE APPENDIX UNDER REVIEW BUSINESS REVIEW PERFORMANCE 5 Annual Financial Results for the year ended 28 February 2023 2
Slide 3: Year Under Review
01 YEAR UNDER REVIEW 3
Slide 4: Core Message
CORE MESSAGE Financial health Well diversified Good traction is robust, with the projects and in both the strongest results product offerings Developments and and most resilient to cater to various Memorial Parks balance sheet income groups segments in history #sustainableactions Annual Financial Re
Slide 5: Financial Overview of the Year
FINANCIAL OVERVIEW OF THE YEAR Key financial metrics: Gross profit margin of Trade and other payables 3 186 23.5% Profit after tax increased by HEPS of 45.0% decreased by units completed an increase of 40,8% to R186.2m 153.18 cents Positive 14.6% to R360.5m in current year 2.2% 2022: R132.2m 2022: 1
Slide 6: Environmental, Social and Governance ("ESG")
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) Total staff complement analysis Corporate social responsibility (“CSR”) African Coloured Indian White CSR | Percentage spend per category Education Infrastructure development Male 1.2% 12.0% Total 58.9% 7.8% 2.0% 31.1% 55.2% Other CSR activities Female 6.
Slide 7: Underlying Business Performance
02 UNDERLYING BUSINESS PERFORMANCE 7
Slide 8: Contributions to Group
CONTRIBUTIONS TO GROUP Revenue and profit after tax * contribution to Group 98% 2% Memorial Parks is a key expansion area for the Group with the medium-term objective to grow cash receipts from Memorial Parks to support all Group overheads and interest obligations. (*) excluding other segments Annua
Slide 9: Integrated Residential Developments
INTEGRATED RESIDENTIAL DEVELOPMENTS Construction momentum continues as Calgro M3 builds homes which enhance the environment and contribute to a change in lifestyle, creating a space where communities can thrive. UWC 308 on Kern 32 on Pine Annual Financial Results for the year ended 28 February 2023
Slide 10: Integrated Residential Developments: Fleurhof | Gauteng
INTEGRATED RESIDENTIAL DEVELOPMENTS Fleurhof | Gauteng Annual Financial Results for the year ended 28 February 2023 10
Slide 11: Integrated Residential Developments
INTEGRATED RESIDENTIAL DEVELOPMENTS Revenue increased by 17,3% • Maximising core project returns through town planning, improved designs, and product enhancements – Efficient design layouts added >1 600 units at no additional capital cost • Gross margin 23,1% (within target range) • Self-funded R249
Slide 12: Integrated Residential Developments
INTEGRATED RESIDENTIAL DEVELOPMENTS Units completed 3 186 Under construction 2 719 Total pipeline 20 263 Active projects Units planned for (primarily in Gauteng and the Western Cape) 9 Cash generating projects 9 under construction < 1 750 Total segment revenue (2023) Revenue pipeline Units under Tot
Slide 13: Integrated Residential Developments
INTEGRATED RESIDENTIAL DEVELOPMENTS • Revenue diversification between projects and provinces • Large order book – Non- subsidised units focus • High demand • Enhanced product and lifestyle offering whilst taking affordability into account – Demonstrating value for money offering • Meticulous capital
Slide 14: Memorial Parks
MEMORIAL PARKS Nasrec Fourways Durbanville Annual Financial Results for the year ended 28 February 2023 14
Slide 15: Memorial Parks
MEMORIAL PARKS • Total cash received decreased by 26.0% to R47.9million (2022: R64.7million) • Data driven marketing implemented end 2022 financial year • Continued focus on distribution channels and affordability enhancement • Gross profit margin reduced due to fixed cost hurdle. Target margin rema
Slide 16: Memorial Parks | Product Development
MEMORIAL PARKS | PRODUCT DEVELOPMENT Lay-by product Grave quantities • Introduced in July 2022 28 691 • Allows customers up to 24 months to pay for reservation of a grave, at 0% interest • Resulted in an additional R12.4 million in sales 7 184 (not yet reflected in revenue) • Of this amount, R8.9 mi
Slide 17: Memorial Parks
MEMORIAL PARKS • Burial rights awarded at Bloemfontein Memorial Park subsequent to year-end • Focus marketing and leverage both traditional and digital platforms; • raise awareness of services, • increase customer engagement, and • ultimately drive growth. • Primary objective remains to grow annuity
Slide 18: Financial Review
03 FINANCIAL REVIEW MM NN
Slide 19: Financial Summary
FINANCIAL SUMMARY Revenue (R’000) Earnings per share (cents) 1 800 000 180.00 1 600 000 1 525 317 160.00 153.37 1 400 000 1 321 593 140.00 1 200 000 120.00 108.58 997 065 984 130 1 000 000 100.00 879 147 800 000 80.00 600 000 60.00 400 000 40.00 200 000 20.00 14.88 2.53 3.84 0 0.00 2019 2020 2021 20
Slide 20: Statement of Cashflows
STATEMENT OF CASHFLOWS Audited Audited (R’000) Feb 2023 Feb 2022 Cash generated from operating activities Cash generated from operations 86 639 228 222 Finance income received 8 003 1 983 Finance cost paid (90 375) (82 301) Tax paid (5 198) (18 022) Net cash generated from operating activities 2 070
Slide 21: Statement of Cashflows (cont)
STATEMENT OF CASHFLOWS (CONT) Audited Audited (R’000) Feb 2023 Feb 2022 Cash flows advanced / (repaid in) financing activities Proceeds from borrowings 230 000 - Capital repayment of borrowings (194 800) (107 400) Repayment of capital portion of leases (3 073) (2 378) Settlement of share purchase li
Slide 22: Segmental Revenue Contribution
SEGMENTAL REVENUE CONTRIBUTION Audited Audited Residential Property Development Segment - Revenue February February Revenue Disaggregation (R’000) 2023 2022 % change 7% 8% Infrastructure Residential Property Development 1 489 773 1 269 325 17% 31% Open market units Memorial Parks 35 544 52 268 (32%)
Slide 23: Statement of Comprehensive Income
STATEMENT OF COMPREHENSIVE INCOME February February (R’000) 2023 2022 Revenue 1 525 317 1 321 593 Gross profit 357 694 281 847 Gross profit % 23.5% 21.3% Administrative expenses (102 425) (89 774) Share of profit/(loss) of joint ventures – net of tax 5 387 9 642 Profit after taxation 186 288 132 171
Slide 24: Statement of Financial Position | Assets
STATEMENT OF FINANCIAL POSITION | ASSETS Audited Audited (R’000) Feb 2023 Feb 2022 Assets Residential Property Development Segment - Cash and cash equivalents 172 614 191 114 Construction Contracts Disaggregation Trade and other receivables 164 11 147 293 11% Current tax receivable 362 2 372 Constru
Slide 25: Statement of Financial Position | Equity and Liabilities
STATEMENT OF FINANCIAL POSITION | EQUITY AND LIABILITIES Audited Audited (R’000) Feb 2023 Feb 2022 Total equity 1 154 038 963 686 Liabilities Trade and other payables 360 504 422 012 Current income tax liabilities 634 655 Borrowings 876 362 839 068 Deferred income tax liabilities 267 525 213 835 Tot
Slide 26: Borrowing Maturities
BORROWING MATURITIES Rand Rand Rand Outstanding Capital (R’m) Maturity profile (R’m) Maturity profile (R’m) Opening balance 1 March 2022 850.6 FY 2024 282.8 FY 2028 140.0 New debt 230.0 FY 2025 211.8 Debt repaid (194.8) FY 2026 157.5 Closing balance 28 February 2023 885.8 FY 2027 93.8 SUBSEQUENT TO
Slide 27: Covenants
COVENANTS 28 February 28 February 28 February 2023 2022 2021 Net debt to equity ratio 0.62 0.71* 0.99 Debt service cover ratio 1.61 2.15 1.41 (*) This is ahead of communicated targets, however as new infrastructure phases commence, we may see slight increases above the February 2024 target in the sh
Slide 28: Shareholding
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Slide 29: Shareholding
SHAREHOLDING • Bought back 9,27% ordinary shares at an average As of April 2023 price of R2.34 • All shares bought back were cancelled Founding members Institutions • Continue to buy back shares if it makes sense 15% 13% • Exploring adoption of dividend policy • Share incentive scheme approved at 10
Slide 30: The Future
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Slide 31: Building Legacies. Changing Lives
BUILDING LEGACIES. CHANGING LIVES It is in your our hands to create a better world for all who live in it. Nelson Mandela Annual Financial Results for the year ended 28 February 2023 31
Slide 32: Outlook
OUTLOOK FOCUSSED 1 GROWTH 2 MEMORIAL 3 4 TAILORED 5 MARKET 6 PROFITABLE DIVERSIFICATION AND PARKS PRODUCTS INSIGHT OUTLOOK SUSTAINABILITY CONFIDENCE Revenue pipeline of Frankenwald sets stage ▪ Remain optimistic Ensuring affordability, and Our in-depth Targeting a gross profit R18.1 billion, with ov
Slide 33: Outlook
OUTLOOK 7 FINANCIAL 8 DIGITAL 9 SHARE 10 DIVIDEND STRENGTH INNOVATION BUYBACKS POLICY EXPLORATION Robust balance sheet We see significant Continue to consider Evaluating the and liquidity position opportunities for growth share buybacks when the implementation of a complemented by and efficiency thr
Slide 34: Investment Core Message
INVESTMENT CORE MESSAGE Financial health Well diversified Good traction is robust, with the projects and in both the strongest results product offerings Developments and and most resilient to cater to various Memorial Parks balance sheet income groups segments in history #sustainableactions Calgro M
Slide 35: Thank You
THANK YOU Available at www.calgrom3.com: Investor relations Wikus Lategan (CEO) Email: wikus@calgrom3.com Sayuri Naicker (FD) Email: sayurin@calgrom3.com Waldi Joubert (MD – Memorial Parks) Email: waldi@calgrom3.com Vanessa Rech (KRIS) Email: vrech@kris.co.za Tel: +27 11 300 7500 or 083 307 5600 Ann
Slide 36: 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 37: Q&A
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Slide 38: Appendix
07 APPENDIX 38
Slide 39: Business Model
BUSINESS MODEL RESIDENTIAL PROPERTY DEVELOPMENT MEMORIAL PARKS Value is created through a turnkey approach to capitals Value is created through operating in strategic locations and Professional services providing superior products and customer service • Identify project and due diligence • Landscapi
Slide 40: Board Composition
BOARD COMPOSITION Annual Financial Results for the year ended 28 February 2023 40