October 19 2026 11:45
Calgro M3 memorial park, picture supplied
GAUTENG, SOUTH AFRICA
JSE-listed Calgro M3 has kept its profitability steady in a tough market for affordable housing, while pushing ahead with the sale of non-core assets and laying the groundwork for its flagship Bankenveld District City project in Johannesburg.
This is according to the property and property-related investment company, which develops integrated residential housing developments and develops and manages memorial parks. It released its interim results for the six months to 31 August 2026 on Monday October 19.
Group revenue edged up 1.22% to R465m (August 2025: R460m), and the gross profit margin held at 29.46% (2025: 29.43%). That keeps it comfortably above the group’s strategic target band of 20% to 25%.
Net asset value (NAV) rose 4.49% to R17.21 per share, up from R16.47 per share at the end of February 2026. Headline earnings per share (HEPS), however, slipped 4.67% to 78.99 cents (August 2025: 82.86 cents). As in the comparable period last year, no interim dividend was declared.
The standout performer was the Memorial Parks business, where revenue jumped 20.04% to R47.81m and cash collections passed the R60m mark. It remains a smaller part of the group’s operations but its growth has been gradual and positive according to former CEO Wikus Lategan and current CEO Ben Pierre Malherbe.
“During the six months, we actively continued to execute the board-approved strategy, further progressing the sale of non-core assets, progressing construction and continuing to trade out of non-core projects. We also ensured that the Group’s core projects remain appropriately serviced and ready for implementation,” said Malherbe.
That strategy has four main pillars: investing in strategic infrastructure, selling non-core assets, reducing net debt and expanding the Memorial Parks segment.
Non-core disposals moving forward
Malherbe said the disposal of non-core assets remains a key strategic priority. These assets sit mainly in the mid-to-high property segment and retirement estates, which fall outside the group’s core focus on integrated and affordable housing.
The sell-off is not a quick process. “Given the size, developmental stage and nature of the non-core assets, the disposal programme is targeted for completion within the next five years,” he said.
There has been concrete progress over the past six months in terms of disposals.
Cornubia land parcel – Calgro M3 has accepted an offer to purchase. The buyer is now in its due diligence period. Once that is complete, the sale will become unconditional and will be recognised in the group’s accounting records.000
Vredehoek property development asset – The group has received a memorandum of understanding. Due diligence is expected to be finalised in the second half of the financial year. Calgro M3 describes this as a shovel-ready project with all approvals in place, which should make it attractive to a buyer.
Three land portions are also under investigation or application for burial opportunities.
Rather than simply selling off land, Calgro M3 is looking at whether some non-core portions could be redeployed into the Memorial Parks business, which would turn idle land into a source of annuity income.
Residential: steady in a difficult market
The Residential Property Development segment remains the backbone of the group, contributing 89.73% of revenue. It generated R417.87m in the six months, marginally down from R420.20m a year earlier.
Its gross profit margin improved slightly to 26.56% (August 2025: 26.25%), above the group’s target range. Calgro M3 attributes this to the typology mix of units delivered and historical land costs, meaning land bought years ago at lower prices is still feeding through into today’s margins.
The company described the segment’s performance as consistent in a challenging operating environment. Infrastructure construction continued at what the group calls an appropriate level, so that projects stay serviced and ready to roll out once market conditions normalise.
A theme of the results is Calgro M3’s caution about construction risk. The group is following a sales-led approach, preferring to secure guaranteed off-take agreements before it starts building.
“The period saw continued focus on sales-led construction, with the Group favouring guaranteed off-take agreements before construction activities begin. We currently hold in excess of 1 418 opportunities under construction and/or stock on hand, of which approximately 55% has been sold to rental investors through guaranteed off-take agreements,” Malherbe explained.
In practical terms, that means roughly 780 of those units are already committed to rental investors, limiting the group’s exposure to unsold stock.
On top of the 1 418 opportunities under construction or in stock, Calgro M3 has 1 724 serviced residential opportunities, which are sites with infrastructure already installed and ready for building.
Calgro M3 has also been widening the range of homes it offers to cash-strapped buyers. At Fleurhof, the group rolled out a mix of bachelor, one-bedroom and two-bedroom units, with selling prices starting at R399 000. The company says the units have attracted strong demand and interest.
A new product is under construction at South Hills and is expected to be completed in the second half of the current year.
Bulk and link infrastructure continued to be installed at Fleurhof and Jabulani. Together, these two projects give Calgro M3 a pipeline of 5 100 opportunities, which will be rolled out in line with sales demand.
Bankenveld District City on track
The group’s biggest long-term bet, Bankenveld District City (BDC), is on schedule. The first phase of bulk and link infrastructure is due for completion in the first quarter of the 2028 financial year.
Internal infrastructure, such as roads and services within the development itself, will start once the bulk and link work is done, in line with the project’s development framework and timelines.
Malherbe sees BDC as central to the group’s future.
“Continued investment in strategic infrastructure, including the BDC project, will support the Group’s long-term development pipeline and its ability to deliver sustainable growth over the medium to long term,” he said.
Memorial Parks: the growth engine
While residential development brings in most of the revenue, the Memorial Parks segment is where Calgro M3 is showing the strongest growth.
Revenue rose 20.04% to R47.81m (August 2025: R39.83m), and the segment’s gross profit margin widened to 54.78% from 50.39%. That’s roughly double the margin of the residential business.
The growth came from higher volumes. Grave sales rose 16.21% and burials were up 19.19%. Completed lay-by sales, where customers pay off a grave in instalments, made up 26.20% of the segment’s revenue.
Cash collections, a key measure for a business built on lay-by sales, increased 17.81% to R60.83m (August 2025: R51.63m). Collections exceeding revenue reflect the lay-by model, with customers paying in advance for graves they will use in future.
Calgro M3 owns and manages six memorial parks, which it positions as a private, secure alternative to traditional municipal cemeteries.
“The segment has successfully matured into a sustainable business unit and a growing contributor to the Group,” said Malherbe.
The group’s strategy for the segment is unchanged: expand its footprint through new parks and build up annuity income by growing the lay-by book.
Taken together, the results paint a picture of a company in consolidation mode. Revenue was essentially flat, but margins held up well above target, and NAV per share climbed by 74 cents in six months.
The dip in HEPS takes some of the shine off the numbers, and shareholders will again go without an interim dividend. But the group’s priorities are clear: reduce debt, sell what doesn’t fit, protect margins and build only what has already been sold.
The Memorial Parks business is increasingly important to that story. At just over 10% of group revenue, it is still small, but it is growing at 20% a year, delivering margins of around 55% and generating predictable annuity-style cash flows. For a group whose main business is exposed to the ups and downs of affordable housing, that is a valuable source of diversification.
Calgro M3 is not expecting its operating conditions to improve quickly.
“Looking ahead, the Group expects the operating environment to remain constrained, with end-user demand and the pace of recovery in the affordable housing market continuing to be affected by broader macroeconomic and political headwinds. The upcoming municipal elections and associated local government budget uncertainty are expected to add further complexity to approval and service delivery timelines in the near term,” the company said in its results announcement.
This is a risk for a developer whose projects depend heavily on municipal approvals and bulk services. However, Calgro M3 believes it is well placed to ride it out. The group says its stock of serviced opportunities means it can keep developing regardless of near-term delays at municipal level.
Malherbe said that, despite these constraints, the group would stay focused on disciplined execution of its approved strategy: investing in strategic infrastructure, prioritising the disposal of non-core assets, reducing net debt and expanding the Memorial Parks segment.
247@propertyflash.co.za
Alistair Anderson – Property Flash founder and editor
