Listed on the JSE, Calgro M3 has managed to sustain its profit levels despite a challenging affordable-housing market, while continuing to divest non-core holdings and preparing for its flagship Bankenveld District City development in Johannesburg.
The firm, which builds integrated residential projects and operates memorial parks, published its interim figures for the six-month period ending 31 August 2026 on Monday.
Group turnover rose marginally by 1.22% to R465 million, compared with R460 million in the same period a year earlier, and the gross profit ratio stayed at 29.46% versus 29.43% in 2025. This remains well above the company’s strategic band of 20%–25%.
Net asset value per share increased 4.49% to R17.21, up from R16.47 at the close of February 2026. However, headline earnings per share fell 4.67% to 78.99 cents, down from 82.86 cents a year prior. As in the comparable period last year, no interim dividend was announced.
Non-Core Disposals Moving Forward
Chief executive Ben Pierre Malherbe reiterated that shedding non-core properties continues to be a central strategic focus. These assets are primarily located in the mid-to-high-end property segment and in retirement-estate portfolios, which lie outside the company’s core emphasis on integrated, affordable housing.
The divestment timeline is not short-term. “Given the size, developmental stage and nature of the non-core assets, the disposal programme is targeted for completion within the next five years,” he explained.
Considerable headway has been made over the past half-year. Calgro M3 has accepted a bid for a land parcel in Cornubia, with the purchaser now conducting due-diligence. The group has also secured a memorandum of understanding for a Vredehoek development, with the due-diligence phase expected to conclude in the latter half of the financial year.
According to Calgro M3, the Vredehoek site is shovel-ready, possessing all necessary approvals, which should enhance its marketability. Three additional land blocks are being examined for potential burial-site applications.
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Beyond outright sales, the company is evaluating whether certain non-core tracts could be repurposed for its Memorial Parks division, thereby converting idle land into a source of annuity-type revenue.
Revenue from Memorial Parks climbed 20.04% to R47.81 million, while the segment’s gross profit ratio widened to 54.78% from 50.39%. Grave sales rose 16.21% and burial services increased 19.19%. Installment-based grave purchases accounted for 26.20% of the segment’s turnover.
Cash collections, a key indicator for a lay-by-driven model, grew 17.81% to R60.83 million, up from R51.63 million in August 2025. The fact that collections exceed revenue reflects customers paying in advance for graves they will occupy later.
Calgro M3 operates six memorial parks, positioning them as private, secure alternatives to municipal cemeteries. “The segment has successfully matured into a sustainable business unit and a growing contributor to the Group,” Malherbe said.
Residential Development Maintains Stability
The Residential Property Development arm remains the cornerstone of the business, delivering 89.73% of total revenue. It generated R417.87 million in the six-month period, a slight decline from R420.20 million a year earlier.
The gross profit margin for this division edged up to 26.56% from 26.25% in August 2025, surpassing the group’s target range. Calgro M3 attributes the improvement to the mix of unit types delivered and to legacy land costs, meaning land purchased in earlier years at lower prices continues to bolster current margins.
The company described the performance as steady despite a tough operating backdrop. Infrastructure construction proceeded at a level the group deems “appropriate,” ensuring projects stay serviced and ready for rollout when market conditions improve.
A recurring theme in the results is the firm’s cautious stance on construction risk. The group follows a sales-led methodology, preferring to lock in guaranteed off-take agreements before commencing building.
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During the reporting period the Group maintained this approach, holding more than 1 418 opportunities that are either under construction or held as inventory, of which roughly 55% have already been sold to rental investors via guaranteed off-take contracts.
In practical terms, about 780 of those units are committed to rental investors, limiting exposure to unsold stock. In addition to the 1 418 opportunities, Calgro M3 has 1 724 serviced residential sites—plots where infrastructure is already in place and ready for development.
The company has also broadened its product range for price-sensitive buyers. At Fleurhof, it launched a mix of bachelor, one-bedroom and two-bedroom homes with starting prices of R399 000, reporting strong interest and demand.
A new development is underway at South Hills, slated for completion in the second half of the current year. Bulk and link infrastructure continued to be installed at both Fleurhof and Jabulani, together providing a pipeline of 5 100 opportunities that will be released in line with market demand.
Bankenveld District City Project on Track
The group’s largest long-term initiative, Bankenveld District City (BDC), remains on schedule. The first phase of bulk-and-link infrastructure is expected to be finished in the first quarter of the 2028 financial year.
Once the bulk-and-link works are complete, internal infrastructure such as internal roads and services will be installed, following the project’s development framework and timeline. Malherbe views BDC as key to the company’s future.
“Continued investment in strategic infrastructure, including the BDC project, will support the Group’s long-term development pipeline and its ability to deliver sustainable growth over the medium to long term,” he said.
