Balwin Properties. Photo: Supplied
Balwin Properties. Photo: Supplied

Balwin is back after lockdown earnings drop

By Edward West Time of article published Oct 13, 2020

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CAPE TOWN - Balwin Properties’ headline earnings fell 56 percent to 17cents a share in the six months to August 31, after the lockdown stopped building for three months.

Chief executive Steve Brookes said that the group, however, hoped to end the year better.

An interim dividend of 19.6c a share was well up, compared with 11.7c in the first half of trading last year, but it had included the dividend for the last financial year, which had also been deferred due to the Covid-19 crisis.

Brookes said the intention was to declare a consistent dividend policy of 30percent of net taxed profit.

The share price increased 4.3percent to R4.38 by midday yesterday.

Balwin is a specialist developer of large-scale sectional title estates in Johannesburg and Tshwane, the uMhlanga area of KwaZulu-Natal and the Western Cape.

The group, which has a development pipeline of more than 55004 apartments across 73 development over 10 years, recently announced the Mooikloof Mega Residential City development in Tshwane, involving the development of an initial 16000 units, with potential to build up to 50000 units over time.

Brookes said the group took empowerment and skills transfer and development seriously at all levels in the group and did their best to purchase only local materials, while they were also in negotiations with a potential empowerment partner after trying for a number of years to find a suitable one.

The start-up of construction after the lockdown was done on a phased basis, in line with regulations, since June 1, and they planned for building to be fully back on track by the end of the year, he said.

Revenue for the six months fell 35percent to R930million. Net asset value was up 9percent to R6.31.

Brookes said demand remained strong.

During the lockdown, the group built on its online sales platform, and sales were now done every day of the week, whereas in the past, potential buyers used to only come view the properties on a Sunday.

“We are finding that buyers are quite comfortable buying online,” he said.

Balwin handed over 896 units in the six months, a 32percent decrease, due to the inability to complete building of the apartments through lockdown.

Demand for one- and two-bedroomed apartments remained strong, comprising 74 percent of total apartments sold.

Two thousand four hundred and sixty-six sales were recorded during the period.

Some 1667 units were pre-sold, an increase of 685 units over the same time a year before.

Cash on hand improved to R427.7m by the end of the interim period, an increase of R153.8m from the prior period.

Debt to equity at the end of the interim period was 25 percent compared with 23 percent in the prior corresponding period, well within the board threshold of 50 percent.


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