South African property developer feels the pain

Property developer Calgro M3 experienced a significant decline in revenue and profit in its 2025 financial year.

Calgro M3 is a property and property-related investment company specialising in the development of Integrated Residential Housing Developments and the development and management of Memorial Parks.

The company released its results for the year ending 28 February 2025 on Monday, 12 May 2025.

CEO Ben Pierre Malherbe said this financial year was marked by strategic resilience, with gross margin growth maintained despite revenue pressures, strategic expansion of the group’s pipeline, and expansion of its Memorial Parks business segment.

He revealed that Calgro’s development pipeline comprises 36,136 residential opportunities and 117,471 burial rights, representing a combined revenue pipeline of R31.8 billion.

However, Calgro reported a 32.69% decline in revenue to R869 million for the year. 

The company explained that this is due to a strategic decision to slow production in the first half of the year in response to political uncertainty and macroeconomic pressures impacting consumer demand, which translated into lacklustre open market sales.

It added that cost efficiency remains a key focus area, with administrative expenses decreasing by 2.71% to R95 million.

The company’s earnings also suffered in the period, with earnings per share decreasing to 171.72 cents from 191.10 cents the previous year.

Calgro’s headline earnings per share decreased to 171.36 cents from 188.95 cents in 2024.

Its total comprehensive income for the 2025 financial year was R166.12 million, down 15.19% from R195.87 million in the prior year.

However, despite experiencing challenging economic conditions, Calgro improved its gross profit margin, reaching 29.43%. 

It explained that the gross profit margin positively benefited from historic land and infrastructure costs, which optimised margin growth, a focus on open market sales and stringent cost control.

Specifically, Calgro said the improvement in its gross profit margin was primarily driven by unit sales in the open market and non-public sector, along with a favourable project and product mix that benefited from historic land and infrastructure costs.

“As Calgro M3 enters its transformative growth phase and breaks ground on new developments, its robust pipeline provides diversity across provinces and projects, ensuring a balanced portfolio while effectively managing concentration risk,” the company explained.

“With the rollout of the remaining pipeline, we will continue to invest in innovating our building designs to minimise financial and environmental impacts.” 

The company believed this will ensure that Calgro M3 remains at the forefront of industry innovation, thereby maintaining its competitive edge in the market.

Calgro specifically highlighted the performance of its Memorial Parks segment, which has shown robust growth in the year, expanding its footprint to six active Memorial Parks.

“Our aim remains the expansion of our footprint, whilst leveraging off our remaining pipeline, thereby bringing dignified burial solutions to a larger community, with regular investment opportunities being investigated and considered by the group,” it said.

Calgro declared a final gross cash dividend of 8.64 cents per ordinary share.