Despite market sentiment trading positively following the announcement of the Government of National Unity (GNU) and the improvement in macro-economic conditions, this has not flown materially into the residential property market due to the over-arching high borrowing costs for prospective buyers, says Balwin Properties who have posted their interim results for the six months ended August 2024.
Balwin reported a decrease of 28% in its group revenue to R852.7 million (August 2023: R1.2 billion), largely due to the decline in apartment sales where 640 units were recognised in revenue, down 23% on the 834 apartments during the prior period. The Group experienced moderate sales price pressure where sales incentives continued to be utilised to support demand, particularly in Gauteng.
Its annuity business portfolio continued to show growth, increasing its revenue by 17% to R65.8 million (August 2023: R56.3 million) with its contribution to total group revenue increasing to 7.7% (August 2023: 4.7%).
Balwin’s gross profit margin remained consistent with the prior period at 32% (August 2023: 33%), representing growth from its gross profit reported for the financial year ended February 2024 of 28%. The gross profit margin reported was supported by the increased contributions from its annuity businesses with the gross profit margin from the sale of apartments experiencing pressure during the period – a decrease to 23% (August 2023:28%). While the margin showed a decline from the prior interim period, it remained materially flat with the margin recorded for FY2024 24%.
Consolidated operating expenditure amounted to R155.1 million, a 7% decrease from the prior interim period. Balwin recorded a profit after tax of R76.9 million, a decrease of 57% over the prior period.
Balwin’s earnings per share recorded a decrease of 57% to 16.34 cents per share with its headline earnings per share decreasing by 57% to 16.26 cents per share. Its net asset value (NAV) per share recorded an increase of 3% to 875.05 cents per share.
The Group closed the period with a cash balance of R242.8 million with its loan-to-value (LTV) ratio reducing marginally to 40.2% (February 2024: 40.5%).
Its Board resolved not to declare a dividend for the period.
