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Land grabs, drought weigh on Calgro M3’s earnings
For what they are calling their toughest interim period ever, Calgro M3's basic earnings per share fell by 50.16 per cent and headline earnings per share 93.48 per cent. Wikus Lategan, CEO, Calgro M3 spoke to CNBC Africa about land grabs and national drought.
Mon, 22 Oct 2018 15:08:57 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The significant drop in Calgro M3's earnings per share was attributed to various factors, including the cancellation of projects, land grabs leading to scrapped units, and delays in approvals resulting in standing time costs.
- The incidents in Fleur of and Scottsdene underscored the housing shortfall in South Africa, with criminal elements exacerbating the situation in Scottsdene and a lack of proper housing forcing people to stay in mining hostels in Fleur of.
- Calgro M3's efforts to address the housing backlog and mitigate the impact of the drought through green initiatives have been pivotal in sustaining growth and overcoming challenges in the property development and memorial parks sectors.
Calgro M3, a leading property development and memorial parks company, recently reported their toughest interim period ever with a significant drop in their earnings per share. The CEO, Wikus Lategan, sat down with CNBC Africa to discuss the factors behind this decline, including land grabs and the national drought affecting the company's bottom line. Lategan highlighted that various issues, such as the cancellation of a major project, land grabs resulting in scrapped units, and delays in approvals leading to standing time costs, were key contributors to the decline in earnings. He also mentioned the increase in overhead costs due to capacity building efforts and consultancy fees related to resolving litigation challenges. These challenges posed significant hurdles for the company during the period under review. When discussing the impact of land grabs on the company, Lategan shed light on two specific incidents in Fleur of and Scottsdene, Cape Town. He attributed the situation in Scottsdene to a housing shortfall and criminal elements that caused damages amounting to millions. On the other hand, Fleur of witnessed people staying in mining hostels due to a lack of proper housing. While the people of Fleur of have been relocated to better accommodations, challenges remain in Scottsdene as some families still await assistance from the City of Cape Town. This highlights the ongoing housing backlog issue in South Africa, which Lategan acknowledged as a complex challenge that requires collaboration between government and private sectors to address effectively. Despite the costs incurred from these challenges, Calgro M3 remains in discussions with various levels of government to find sustainable solutions for the housing backlog. Regarding the drought in the Western Cape, Lategan mentioned that the company has implemented green initiatives to reduce water usage in construction activities. He emphasized the importance of building up capacity to ensure water security and meet the demand for housing in the region. Moreover, he highlighted the positive growth in the company's memorial parks portfolio, with sales increasing by 128%. This diversification strategy has proven successful, with the aim of having the residential and memorial park businesses cover the group's operating expenses in the future. Lategan expressed confidence in the continued growth of sales in the upcoming months, signaling promising prospects for the company's financial performance. In conclusion, Calgro M3 faces challenges from land grabs and the national drought impacting their earnings, but remains resilient in their efforts to address these issues and drive growth in their key business segments.
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