Calgro M3 shares fall 7.7% as profits tumble amidst infrastructure investments

CALGRO M3, the South African integrated housing and memorial parks group traded on the JSE, witnessed a significant 7.7% drop in share price on Monday following the announcement of an 18.4% fall in headline earnings per share for the six months ended August 31.

- EDWARD WEST

The decline in share price to R5.13 in the morning - it traded at R6.60 a year ago - may be due to raised concerns among investors as the company grapples with substantial capital allocations to ongoing projects.

The decline in Calgro M3's revenue and profit for the six months was attributed to its investments in the Bankenveld District City Project, expected to result in some 20 000 additional housing units, where infrastructure installations have just begun.

These costs are slated to reach R158 million over the 2026 and 2027 financial periods. Revenues from these developments would not be recognised until public sector agreements were finalised.

During the reporting period, headline earnings per share decreased to 82.26 cents from the previous year's 100.87 cents, with gross revenue witnessing a drop of over 10%.