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Calgro M3 Holdings, a housing developer, comes to AltX at a time when it is becoming difficult to determine whether a new construction listing provides a good value proposition for potential investors.
The construction sector is a hot investment topic at the moment and is bound to attract many new listings.
Calgro M3 Holdings is planning to place 12m shares at R3 a share on a forward PE of 9,55 to February 2008 and a limited vendor placement of 6.6m shares at R3 a share.
The housing developer is expected to list on November 13 with a market capitalisation of about R360m, which would make it smaller than recently listed William Tell and Infrasors.
Calgro M3 Holdings, which delivered about R124m in revenues in the 2007 financial year, will be 59.92% owned by its directors and management on listing and the remaining 40.08% to be held by a black economic empowerment (BEE) firm.
The group executive directors include its CEO Peter Waweru, a founder of Abacus Financial Services; Craig Daly, the group financial director and a former director at Cashbuild; Ben Malherbe and Frederik Steyn.
On listing at least 25.12% of the 40.08% allocated to BEE firm will be own directly by shareholders consisting of Mvua Property Partners, Khuselo Investments, black management. The group has further plans to increase its BEE credentials.
Eddie Funde, the outgoing chairperson of the SABC board, and Pumla Radebe would be appointed as non-executive directors of Calgro M3 Holdings. Radebe has been appointed as a chairperson of the board of Calgro M3 Holdings.
The group, which was founded by Derek and Deon Steyn in 1995, posted R4.4m in net profit after tax in the year to February 2007 and is forecasted to climb to R38m in 2008 financial year. The group revenue is expected to grow to R563m in 2008 financial year and increase to R839 in the year to February 2009.
Calgro M3 Holdings develops affordable and RDP houses as well as sectional title and cluster developments.
Is the group not affected by the current relative slowdown in the residential property market? Maweru doesn't think so because the company is focussed on a niche market of RDP and affordable housing.
The group expects to benefit from the R32.4bn earmarked for low-cost housing as part of government infrastructural expansion plan to 2012.
Maweru said Calgro M3 Holdings' growth would be further boosted by financial services groups wishing to optimise their BEE scorecards in line with the charter through funding for low cost houses, "who can satisfy their obligations through investment in Calgro M3".
- Fin24
