Calgro M3 surges after flagging earnings jump | Business

Shares in affordable housing developer Calgro M3 surged almost 8% on Monday after it flagged a rise in earnings of almost half for the six months to end-August, helped by cost containment, a share buyback and by double-digit revenue growth.

Headline earnings per share are expected to rise in a range of 28.4% and 48.4%, the company said, with revenue increasing by approximately 13.5%.

This was primarily driven by adapting the mix of units developed and sold in response to market conditions, successfully shifting focus to open market sales.

“The current high interest rate environment has caused a reduction in the number of units handed over when compared to the previous period, however through cost management, the gross profit margin remains in line with the gross profit margin reported in the previous period.

Valued at about R530 million on the JSE, Calgro operates primarily in Gauteng and the Western Cape, with nine active projects as of the end of February. 

In its previous half-year, the company generated headline earnings of about R69 million and revenue of R607 million, but during the six months to end August it repurchased 22.6 million shares during at an average price of R2.63, representing 18.6% of opening issued share capital.

Shares in Calgro were up 7.9% in early trade on Monday and have gained more than 70% in the past one year.

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