Balwin’s operational excellence delivers solid results
- Revenue rose 30% to R2,7 billion
- Profit after tax up 18% to R661 million
- HEPS and EPS up 7% each to 141 cents
- Final dividend of 31 cents declared, a 48% increase
- 2711 apartments handed over, of which 2234 registered
- Strong cash balance of R547 million
- Solid demand sustained with 1283 apartments pre-sold for FY 2018
- Significant current pipeline of 33 786 units to be developed over approximately 10 years
- Expansion into high-growth target nodes on track and entry into Durban secured
Balwin, South Africa’s largest homebuilder focusing on large scale sectional-title residential estates in high-growth, high-density metropolitan nodes in South Africa’s major cities, yesterday announced solid financial results for the year ended 28 February 2017.
Balwin had 13 developments under construction during the period, and in line with its forecast, sold 2 711 apartments at an average selling price of R995,000per unit. Revenue increased 30% to R2.7 billion and gross margin remained on target at 37% despite an increase in construction related costs. Profit for the period improved 18% to R661 million.
Balwin listed on 15 October 2015 and is differentiated from other JSE-listed property companies and REITs as its business strategy is underpinned by generating profits through the development and sale of large-scale residential estates. These estates average in size between 500 and 1 000 units and offer buyers secure, affordable, high-quality and environmentally friendly one, two and three-bedroom apartments between 45m2 and 120m2.
Balwin’s investment proposition is backed by a robust, proven, business model supported by urbanisation and growth of the middle class. The Company mitigates risk by matching construction to pre-sales and rolling out developments over several phases which are financed per phase.
“We are continually seeking innovative initiatives to differentiate our product. The latest such innovation is the addition of a Crystal Lagoon to The Blyde, our first development in Riverwalk. This will be the maiden Crystal Lagoon in sub-Saharan Africa and offers buyers a one-of-a-kind lifestyle,” added Brookes.
Balwin has acquired a parcel of land in Ballito, Durban which earmarks its entrance into the KwaZulu-Natal housing market. KwaZulu-Natal is a strategic growth area for Balwin and the Company aims to acquire further land for development and has opened an office in Umhlanga.
“We are mindful of the challenging economic conditions that lie ahead. Balwin’s business model allows for flexibility to rapidly adapt to prevailing market conditions and reduce risk,” Brookes concluded.
Balwin’s policy is to re-invest 70% of its after tax profits back into the business to support development growth, with the remaining 30% of profits distributed to shareholders. Accordingly, a gross dividend of 31 cents per share was declared bringing the total dividends for the year to 42 cents per share.