Our opinion on the current state of CGR

Calgro 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.