Calgro M3 gets revenue Covid boost

Deaths attributed to Covid-19 provided an unexpected revenue boost to JSE-listed property and private memorial parks developer Calgro M3 in the six months to end-August 2020.

Calgro M3 CEO Wikus Lategan said on Monday the group’s memorial parks business, which acts as a risk diversifier against the traditional lumpy and cash intensive residential property development business, illustrated its potential in the first half by increasing cash revenue by 65.7% to R25.8 million in the six months to August from R15.5 million.

The group’s interim results show that accounting revenue grew by 75% to R19.3 million from R11 million in the same period, he said.

“Confirmed Covid-19 burials represent R2.6 million of the total cash received in the period.

“From an internal assessment, the increase in sales is a combination of increased market share, as well as increased mortality over the period as a result of Covid-19.

“The fundamental function of being a stable and risk-mitigating business is clearly being demonstrated through these uncertain times,” he said.

Lategan added that the company’s Nasrec, Fourways and Durbanville memorial parks performed extremely well but Enokuthula in Brakpan is still in its infancy after only becoming fully operational in March.

“The national rollout and development of further land parcels within existing parks is a priority.

“The acquisition of new parks is only planned for the next financial year when the business has a better medium to long-term outlook,” he said.

Residential property developments

Calgro M3’s residential property development business remains the largest contributor to the group’s operations despite experiencing extremely challenging operating conditions during the past few years.

Two months of construction stoppages because of Covid-19 also resulted in this business suffering reduced revenue and incurring standing time costs.

Lategan said this was unprecedented and resulted in once-off costs incurred to ensure future sustainability and liquidity, with Covid-19 costs and the associated standing-time amounting to R35.8 million in the reporting period.

Lategan expects these delays to have an impact on the next six to nine months as handovers and transfers of units are delayed.

This article first appeared on Moneyweb and was republished with permission.

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