Balwin Properties defies odds with strong apartment sales
Share this article:
CAPE TOWN - BALWIN Properties sold 2 550 apartments in the year to end-February, despite lengthy construction delays caused by the pandemic, compared with 2 715 sold in 2019.
No construction activity occurred from March 26 to June 1, and the phased start-up thereafter, all due to Covid-19 restrictions, meant construction activity was adversely impacted through three months or 25 percent of the year, the group said in a trading statement yesterday.
Chief executive Steve Brookes said he was “exceptionally proud of our team’s delivery against these odds, literally working around the clock to ensure that we met customer demands and the quality they associate with the Balwin brand”.
About 3 300 apartments were presold beyond the reporting period and had not been recorded in revenue yet, representing an increase of 2 650 units forward-sold compared to the prior corresponding period.
“This evidences the sustained demand for the product as well as the market’s trust in the brand,” said Brookes.
Another notable event was the gazetting of Mooikloof Mega City, Tshwane East and Greencreek, Tshwane East as Strategic Integrated Projects by the government, two projects that involve an initial total of about 20 000 apartments.
Balwin launched nine new developments in the year, with the initial phases of only two of these included in revenue in the year.
Included in the projects was Wedgewood in Sandton, the first of the newly introduced Lifestyle Collection, where R1 billion in sales was recorded in 45 days from launch.
Brookes said they believed this development would revolutionise access to affordable, upmarket accommodations in prime locations, close to transport nodes and work.
Ways the group mitigated the impact of the pandemic was to launch an online sales platform, and to take measures to increase the rate of construction to match the strong sales demand.
The lower number of apartments sold meant revenue was expected to fall about 8 percent for the year.
Demand for one- and two-bedroom apartments remained strong and comprised 77 percent (2020: 74 percent) of apartments recognised in revenue.
The average selling price was expected to be consistent with that of the prior year, with the marginal selling price growth achieved offset by the change in the mix of apartments sold, together with an increased contribution of sales from the Green Collection model.
“Despite a welcome reduction in the prime lending rate, market conditions remain challenging for the consumer. Balwin continued its marketing campaigns through price incentives and other sales related promotions to drive sales where necessary,” said Brookes.
The group grew its management body to strengthen the leadership team. Cost containment in other areas of the business largely offset these costs.
Balwin paid out full dividends during the year in accordance with the dividend policy of distribution of 30 percent of profits.
Consolidated earnings per share and headline earnings per share for the year ended February 28, 2021, were expected to decrease by between 68 to 72 percent from the prior financial year’s 88 cents.
The share price was up 1.14 percent to R4.45 at midday yesterday, well up from R2.62 a year ago. It closed at R4.45 on the JSE yesterday.