MURRAY & ROBERTS SHARES SLIP AFTER INTERIM LOSS

MURRAY & Roberts Holdings (M&R) reported an attributable loss of

R167 million in the six months to December 31 versus a R163m profit at the same a year before due to the impact of prolonged Covid-19 restrictions on its global projects. The share price fell 3.01 percent by late yesterday afternoon to R8.05. Revenue from continuing operations was static at R10.8 billion compared to the same period a year previously. However, its “quality” order stood at a record R60.5bn versus R50.8bn for the full 2020 financial year. Significant near orders stood at R19.9bn versus R6.4bn in the first half of 2020. Earnings before interest and tax from continuing operations for the six month period fell to R117m compared with R419m previously. Diluted continuing headline loss a share stood at 8 cents versus 49c profit in the first half of the 2020 financial year. Cash, net of debt stood at R300m. The group said it was well positioned for a return to profitability in the 2022 financial year, and to achieve meaningful earnings growth in the short to medium term. “The group is confident that its growth plans are achievable,” a statement said yesterday.

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JSE-LISTED residential property and memorial parks developer Calgro M3 has embarked on a series of actions designed to raise its sustainability, the group said in a statement yesterday.

The most recent of these were the sale on February 25 of a non-core project for R49 million and the conclusion of a share repurchase earlier in the month, with 4.6 percent of its shares repurchased at R2.10 each.

Calgo M3’s shares were up 0.45 percent to R2.06 yesterday morning, after falling steadily from R12.45 over three years.

Its asset base of large projects in various stages of development includes a pipeline of 36 127 available stands, 2 920 of which were under construction at the end of August last year, with many more commenced, and 6 596 were serviced opportunities.

Across the five memorial parks that the group administers, growth had come from being busier than usual due to the pandemic.

“We have gone above and beyond to support grieving families in these unusual times,” chief executive Wikus Lategan said yesterday.

He said proceeds from the sale of non core-projects would be applied to projects that were further progressed and where a better return could be achieved.

“Proceeds will also be used to reduce debt, and/or for possible further share buy-back transactions. It is well known Calgro M3 currently trades at a substantial discount to net asset value,” he said.

Management was working hard to ensure there was sufficient capital to have the necessary infrastructure in place at development projects, rather than to rely on the government for this.

“This ends up being a win-win situation for all concerned, for those buying homes, for Calgro M3 and for government, as Calgro M3 assists to reduce the housing backlog,” said Lategan. He said the firm continued to experience good demand for the housing units that it builds.

The business had been substantially de-risked with long-term infrastructure funding options from development finance institutions, he said.

With respect to the share repurchase, Lategan said the undervalued share price was disappointing given that the group services a high demand sector in South Africa. He said net asset value was close to R6.43 per share, excluding Treasury shares.

“We believe that repurchasing shares at a material discount to intrinsic value is a good opportunity to create value for our shareholders.” The repurchase comprised 4.6 percent of issued share capital, with the repurchased shares subsequently cancelled.

Executive management had personally acquired more than 2 percent of the shares in support of the group’s strategy. Calgro M3 had been able to settle and restructure debt with a net decrease of R111m and with minimal short-term maturities remaining. Additional long-term facilities had been secured.

Lategan said 2020 had been a difficult operating year, given the impact of Covid-19. This was in addition to other problems related to doing business in South Africa, such as invasions of partially built blocks at some developments.

Calgro’s shares closed 2.44 percent lower at R2 on the JSE yesterday.