Nothing to get excited about
The Balwin update was not exciting with headline earnings per share expected to be only between 3.8% and 7.6% higher. This is after it changed the accounting recognition from the last period. The change essentially moves forward when the company recognises the income from a sale and will boost returns as a one-off in this period, yet we’re not seeing it in the numbers. Further, the change in transfer duty in the Budget, which now exempts homes valued below R900 000 (up from R750 000), does not apply to Balwin as it is VAT registered, which means no transfer duty is payable.