Calgro M3 - Investments support strong revenue pipeline

Calgro M3's core business is integrated residential housing development and memorial parks. Established in 1995, the company generates the bulk of its revenue from the Gauteng and Western Cape provinces in South Africa. The residential development business acquires land, develops bulk infrastructure and builds affordable and luxury residential units for sale. In Q224, Calgro M3 acquired a huge land parcel that it plans to develop over the next 15 years, adding ZAR18bn to the current revenue pipeline of ZAR16bn. Calgro also acquired Platinum City Memorial Park, which added ZAR426m to the memorial parks revenue pipeline. The stock is trading at a low historical P/E of 3.0x and a shareholder yield (sum of dividend yield, share buyback yield and debt repayment yield) of 5.4%, underpinned by the recent ZAR73m share buyback. The price to book ratio is 0.4x.

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