Calgro M3 swings to FY loss
Developers, Calgro M3 have released their year-end results and they have swung to a loss in the year ended February 2021. The company's revenue has also dropped by 10.7 per cent but the group still believes it is well positioned with sufficient capital and liquidity to return to activity levels last seen five years ago. Calgro M3 CEO, Wikus Lategaan joins CNBC Africa for more.
Mon, 17 May 2021 16:15:53 GMT
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AI Generated Summary
- CoGROM3's strategic interventions following a revenue decline of 10.7 percent resulted in a notable turnaround, positioning the company on the path to profitability.
- The emphasis on liquidity strength and operational efficiency, coupled with a diversified revenue approach, underscores CoGROM3's resilience in navigating market challenges.
- Decisive measures such as discontinuing the in-house construction division and focusing on core competencies have proven instrumental in optimizing resources and enhancing market competitiveness.
CoGROM3, a prominent developer, recently disclosed its year-end results, revealing a shift to a loss in the year concluding in February 2021. Despite experiencing a decline in revenue of 10.7 percent, the company remains optimistic about its strategic positioning with ample capital and liquidity to restore operations to levels last observed half a decade ago. Vika Salatahan, the CEO of CoGROM3, engaged in an insightful discussion on the company's performance and future strategies. Salatahan elaborated on the efforts to attain profitability amidst challenging circumstances. The organization encountered a 59 million headline loss by the end of August, following a three-month closure during lockdown. However, through strategic interventions, CoGROM3 managed to reverse the position, culminating in an 18 million profit and a remarkable turnaround of 29 million in the latter half of the year. The concentration on specific areas like development business and Memorial Park business yielded promising outcomes, fostering a positive trajectory. The company's liquidity strength was highlighted, emphasizing the generation of 114 million in cash from operations during the COVID period. With 4,600 units currently under construction, representing a substantial increase from the past, CoGROM3 stands poised for sustained growth. Furthermore, the reduced fixed costs and efficient operational management underscore the company's commitment to long-term sustainability. The CEO emphasized the diversified revenue streams, with only 10% stemming from government projects, signifying a significant reliance on the private sector. This diversified approach is instrumental in mitigating risks and enhancing market resilience. The discussion extended to the decision to discontinue the in-house construction division, a strategic move aimed at optimizing resources and leveraging external expertise for construction projects. This tactical shift has proven beneficial, highlighting the importance of focused strategies in navigating industry challenges. Notably, the Memorial Park business exhibited growth, with a substantial contribution from 19-year sales amid the ongoing pandemic. Salatahan expressed pride in the market share expansion and assured a continued growth trajectory in the respective sector, driven by market dynamics rather than external factors like COVID-19. The interview also touched upon the share buyback program initiated by CoGROM3, demonstrating the company's commitment to enhancing shareholder value. Salatahan projected future initiatives, including divestments to bolster capital reserves, reduce debt levels, and potentially undertake additional share buybacks. The comprehensive approach towards financial management and growth strategies mirrors CoGROM3's resilience and agility in navigating evolving market conditions. With a strong focus on operational efficiency, revenue diversification, and prudent financial planning, CoGROM3 aims to emerge stronger from the recent challenges and chart a path towards sustained profitability and growth.