Calgro M3 FY’25 HEPS fell by 9.3%

Johannesburg-based property and private memorial park developer Calgro M3 has encountered a tough period, as indicated by the decrease in its Full Year earnings and profit for the financial year 2025. The group decided to slow down construction leading up to the national elections in 2024, learning from past experiences where unfinished units posed challenges. Ben Pierre Malherbe, the CEO of Calgro M3, discussed these challenges and the company's outlook in an interview with CNBC Africa. Malherbe cited the unexpected formation of a government of national unity post-elections in 2024 as a factor that extended uncertainty and political instability impacting budget availability in the public sector. While the company initially leaned towards private sector projects during this period, investing significantly in infrastructure, they plan to transition back to including units for the public sector to adapt to market demands. Despite these difficulties, Malherbe remains optimistic about the housing market, noting a resurgence in consumer confidence and favorable borrowing conditions. He highlighted the vital role of financial institutions' support in facilitating the sector's recovery and growth. With interest rates expected to continue on a downward trend, Calgro M3 anticipates positive outcomes in the upcoming reporting period, leveraging improved market conditions. Shifting the focus to the company's memorial park segment, Malherbe discussed the rising demand driven by factors such as electric vehicles and service delivery issues in public cemeteries reaching capacity. Calgro M3's innovative approach of offering lay-by options for grave purchases has resonated well with consumers, contributing significantly to revenue. The company aims to expand its presence in the memorial park sector, recognizing untapped potentials like cremations and other services to further drive growth. As Calgro M3 navigates through the economic challenges prevalent in the property market, they emphasize strategic planning and project differentiation to capitalize on existing and new opportunities. The CEO highlighted their diverse project pipeline, comprising over 30,000 prospects, with a mix of cash-intensive new projects and revenue-generating existing ones. By leveraging historical acquisitions like the Fleerolf project and upcoming developments such as Bunkenfeld, the company aims to sustain growth and enhance profitability. In conclusion, despite the recent setbacks reflected in the financial results, Calgro M3 remains resilient and adaptable in the face of evolving market conditions. With a strategic focus on innovation, market responsiveness, and project diversification, the company aims to ride out the challenges and seize opportunities for sustainable growth and success in the future.