Our opinion on the current state of CALGRO-M3(CGR)Calgro (CGR) is a developer of large-scale integrated properties, rental units, and memorial parks. Established in 1995, the company was listed on the JSE in November 2007. Calgro acquires suitable land, plans developments, and then sells or rents residential units or memorial park plots. The company recently secured additional funding of $25 million to finance new development projects. However, one of the challenges it faces is illegal land invasions, which have affected its operations.
In its results for the six months to 31st August 2024, Calgro reported a 26.4% decrease in revenue and headline earnings per share (HEPS) of 101.4c, up from 78.88c in the previous period. The company explained, "A decrease in revenue for the period under review was primarily driven by reduced unit sales due to pressure on the already constrained consumer, and delayed transfers. The Group, however, banked over R200 million in cash during the first two weeks of September."
Technically, the share has been in a strong upward trend since March 2023. Like many property companies, Calgro is still trading well below its net asset value (NAV), offering substantial value to investors. It was added to the Winning Shares List (WSL) on 15th August 2024 at 356c and has since risen to 660c, reflecting significant growth.
CGR trade ideas
Our opinion on the current state of CALGRO-M3(CGR)Calgro M3 Holdings (CGR) is a South African developer known for creating large-scale integrated residential properties, rental units, and memorial parks. Since its inception in 1995 and subsequent listing on the Johannesburg Stock Exchange in November 2007, Calgro has specialized in acquiring land, planning developments, and either selling or renting the resultant residential or memorial park units.
A significant challenge for Calgro has been dealing with illegal land invasions, which notably impacted its operations, costing the company about 25% of its turnover in the half-year period ending in August 2019. Despite these hurdles, Calgro has continued to expand and secure additional financing, most recently obtaining $25 million to fund new development projects.
In its most recent financial report for the year ending 29th February 2024, Calgro showed positive developments. The company managed to hand over 1,794 units, with an additional 1,748 units under construction. There was a notable increase in headline earnings per share (HEPS), which rose to 189.87c from 153.18c in the previous period. This improvement reflects the company's ability to manage costs and enhance profitability efficiently.
Moreover, Calgro reported its highest ever net asset value (NAV) per share, which increased by 40.60% to R13.37, up from R9.51 the previous year. This growth in NAV per share is significant, particularly as it indicates the company's successful enhancement of asset value while maintaining conservative valuation principles, valuing assets at the lower of cost or net realisable value.
From a technical perspective, Calgro's shares have been in a strong upward trend since March 2023, suggesting growing investor confidence. However, like many companies in the property sector, Calgro’s shares are still trading well below their net asset value, which could represent a compelling value proposition for investors looking for opportunities in the real estate development sector. This undervaluation, combined with the company's recent financial improvements and strategic funding to support new projects, positions Calgro as an attractive option for investors seeking exposure to property development with potential for growth.
Our opinion on the current state of CALGRO-M3(CGR)Calgro (CGR) is a developer specializing in large-scale integrated properties, rental units, and memorial parks. Established in 1995 and listed on the JSE in November 2007, the company identifies suitable land, develops it, and then sells or rents the resulting residential or memorial park units. Recently, it secured $25 million in funding to support new development projects.
A significant challenge has been illegal land invasions, which resulted in a loss of around 25% of turnover for the half-year ending August 2019. However, in its results for the six months ending August 31, 2023, Calgro reported a 13.5% increase in revenue and headline earnings per share (HEPS) of 78.88c, up from 57c in the prior period. The company stated that it handed over 949 units during the period, compared to 1,193 units in the previous year. Currently, 2,118 units are under construction, with over half expected to be completed by February 2024. The company has 1,937 serviced units available, and another 3,398 are being serviced.
In a trading statement for the year ending February 29, 2024, Calgro estimated that HEPS would increase by 20.2% to 27.7%. The company noted a reduction in its issued ordinary shares due to a share repurchase program, which reduced the total from 121.4 million to 95.5 million shares.
Technically, the share price has been in a strong upward trend since March 2023. Like many other property companies, Calgro is currently trading well below its net asset value (NAV), presenting a potentially attractive investment opportunity.
Our opinion on the current state of CGRCalgro M3 Holdings, a developer of integrated residential properties, rental units, and memorial parks, was established in 1995 and made its debut on the Johannesburg Stock Exchange (JSE) in November 2007. The company specializes in acquiring suitable land for development and either sells or leases the developed residential or memorial park units. Calgro has recently secured additional funding of $25 million to support new development projects. One significant challenge the company has faced is illegal land invasions, which, in the half-year leading to August 2019, resulted in a loss equivalent to about 25% of its turnover.
For the six-month period ending on 31st August 2023, Calgro reported a 13.5% increase in revenue and headline earnings per share (HEPS) of 78.88c, up from 57c in the prior corresponding period. The company achieved this performance despite handing over 949 opportunities, compared to 1,193 in the previous period of August 2022. With 2,118 opportunities currently under construction and over half expected to be handed over by February 2024, the group has 1,937 serviced opportunities and is in the process of servicing an additional 3,398 opportunities.
Looking forward to the year ending on 29th February 2024, Calgro anticipates that HEPS will increase by at least 20%. This projection is partly attributed to the reduction in the company's issued ordinary shares from 121.4 million to 95.487 million, a result of its share repurchase program.
Calgro's share price history features a notable triple top formation with peaks at 2350c in August 2015, November 2015, and May 2016, followed by a steady decline until April 2020. The share price then formed an "island" trading range between 210c and 270c, subsequently rising to 510c in October 2021 before adjusting to 472c. Like many property development companies, Calgro is currently trading at less than half of its net asset value (NAV), suggesting that the shares represent good value for potential investors.
Calgro settings itself for super upside in 2024W Formation has formed on Calgro M3.
We haven't had our breakout yet but it's most definitely forming higher lows. ANd it's above the 200MA with a predominant uptrend.
This is all great news for potential upside.
We'll set the first target at R6.03
FUNDAMENTALS:
Calgro M3, a South African property development company, has been experiencing a rally in its stock for several reasons:
Impressive Financial Performance:
Calgro M3 reported strong financial results for the fiscal year ending in February 2023.
This included a significant increase in earnings per share and overall revenue, demonstrating the company's ability to generate sustainable profits and manage costs effectively.
Robust Revenue Pipeline:
The company has a solid revenue pipeline in residential property development, with a forecast of R15.9 billion.
This includes over 22,000 opportunities and the inclusion of a major development project, Frankenwald, which is expected to add at least 20,000 opportunities.
Successful Residential Developments:
Calgro M3 has been successful in its residential property development segment, with a large number of completed and under-construction opportunities.
This success is a key driver of the company's revenue and growth prospects.
Our opinion on the current state of CGRCalgro (CGR) is a developer of large-scale integrated properties, rental units and memorials. It was established in 1995 and listed on the JSE in November 2007. It acquires suitable land and then plans a development and sells off or rents the residential or memorial park units. The company has negotiated further funding of FWB:25M to fund new development projects. A major problem for this company has been illegal land invasions which cost it roughly 25% of its turnover in the half-year to August 2019. In its results for the six months to 31st August 2023 the company reported revenue up by 13,5% and headline earnings per share (HEPS) of 78,88c compared with 57c in the previous period. The company said, "Having handed over 949 opportunities in the current period (August 2022: 1 193 opportunities), 2 118 opportunities are under construction, with more than half set for hand- over by February 2024. Currently, the Group has 1 937 serviced opportunities whilst servicing a further 3 398 opportunities". Technically, this company made an impressive triple top formation with tops at 2350c in August 2015, November 2015 and May 2016. After that it fell steadily until April 2020. After that it formed an "island" at between 210c and 270c. The share moved up to 510c in October 2021, but has fallen back to 435c. Like many property companies it is now trading for less than half of its net asset value (NAV) and represents good value.