Good afternoon, everyone, and welcome to the August 2024 results presentation of Calgro M3. A special word of welcome to my co-host, my co-presenter today, Sayuri Naicker, our financial director, that is, officially still on maternity leave, but is presenting today, while we stand in for her while she was on maternity leave, as well as Ben-Pierre Malherbe taking over from me on the first of January as group CEO. Also, to any of our board members online and in the room, our chairman of the audit committee, George Hauptfleisch is on, members of the media, shareholders, stakeholders, debt providers, you're very important people. Without you, we don't have a business. Welcome to what will be my last results presentation at Calgro M3. Maybe just a few practicalities.
Throughout the presentation, please post your questions, in the Q&A on the right-hand side of the chat box. We'll pick up from both, and then we'll deal with those questions later on. I will start the presentation. I'll take you through our operational side. I will then hand over to Sayuri, that will take care of the financials, and then I'll end off, and then we'll follow up with questions. This year has been another interesting six months, where I believe, although on face value, our revenue looks like it decreased, I believe that, we've made severe strides in moving forward in a transformative company, where we really shown that we're adaptable. If you add the revenue from JVs, we're not that far down, but we continue to build legacies, changing lives. We continue to hand over houses.
We continue to really make a difference in the people's lives we serve on these projects, and I think that's a huge step in the right direction. You'll see from the, I think it's now the fourth or the fifth consecutive highest-ever results presentation, which we're presenting, and that's in rand terms, that it disregard the share buybacks, that we're now really sustainable, and we continue to move forward on that trajectory. Let's see if the slides work. If you take the period under review, my first message is we stuck to the plan, and we really continue to do what we do well. We continue to focus on the business.
We continue to see the light and not the train coming down the tunnel, but really, the light is Africa, and I believe that we cannot do business as Africa if we can't see the light. In some instances, we had to be the light. We had to generate the light. We had to build the light, and for that reason, again, building legacies, changing lives. We're a business of adaptable pipeline, very important for us. We can, at a very late stage in the cycle, the site, who we built to post the infrastructure site. Now, I'll touch on a bit on what that infrastructure entails.
We now have organic growth, just working the current projects, working it out, while we also added to the pipeline in the form of more land thanks to Fleurhof, and the Rationale, I'll also touch on a bit later, as well as Frankenwald, that's now transferred in September. And then we've got the balance sheet to do that with. A robust balance sheet, a balance sheet that generates sufficient liquidity to do all of these things throughout the cycle. So if we add to the next slide, how did we implement this? We're going to start on the right-hand side. We generated liquidity. We have to have liquidity. Then we've got capital to invest. In lots of cases, people only look at financial capital that disregard the human capital.
Human capital side being very important in all businesses, but specifically in Calgro, which we believe is a very specific niche we've put into the market, then we continue to drive the sales hard and back from our Memorial Park business, as well as our development business, and then, last but not least, we're increasing our market share, specifically in terms of our Memorial Park business. Development business went back slightly, but the market's under pressure, so in terms of market share, we're quite certain that we've also increased that, although the numbers look like we're slightly down in terms of unit deliveries, and all of that to that hashtag, sustainable actions, driving sustainability of the business forward. Maybe just going through the numbers a bit. We ended over 869 units.
These days, our revenue recognition and an accounting, our cash flow cycle is very closely aligned with the accounting policies, so you'll see that coming through. We done that at a 29% margin. It's above our average range of between 20% and 25%, our target range. And the reason for that is more attributable to the Memorial Park business that achieved 57.1% than what it is attributable to the development business, that ended off at 27.86%. But yes, development's also done well. Why is it doing well? Because it's now benefiting from historic land prices, historic infrastructure prices, and also all the units we currently have under construction is a new design units, where there's less construction square meters for every sellable square meter. That resulted in effectively.
Then if you look at our administrative expenses, it's down a further 2%. And why I say further is it also decreased 4.6% for the full year up to February 2024. And last night, I just scanned back through the integrated reports and the financial results. That number was ZAR 55 million for the August 2015 year. So over the last 10 years, we effectively decreased it from ZAR 55 million to ZAR 49 million for the comparable six months, or a 10.9% decrease in true rand terms, not taking into inflation into account. Showing how much it's easier to save money, especially if you're going through difficult economic cycles, than to necessarily make money. And if you save enough money, you can still drive the bottom line up without driving riskier revenue.
We focus on good quality revenue and then save costs where applicable. That resulted in EPS and HEPS being at ZAR 1.014 per share, both up roughly 28.55%. We then have our net debt to equity stay consistent at 0.63, and our loan to value in terms of the typical property company, REIT calc, sitting at 50.4. So also that in range. We have 1,150,559 units under construction.
But I think more importantly, we're busy starting up over the next six months another 5,1592, showing how we're consistently working to, working towards the next cycle and the sale, keep driving the sales. We invested ZAR 158 million in infrastructure. So why that number is so applicable, actually more applicable at this stage is, that's already off from my cash from operations. It's already out of my operations, and it's in a six-month period of time. If you then look at that number, and you compare that to the ZAR 315 million we invested in the previous twelve months in infrastructure, now sitting, resulting in a position where Fleurhof, Belhar, and Jabulani have touching 12,000 units still available to develop, but with less than ZAR 100 million bulk and link infrastructure required.
So that long capital cycle, we've now taken away. The deep capital cycle is already invested, and now most of our capital going forward can be invested in our Frankenwald project. And that ZAR 150 million, go through the detail just now, is not that major number. If you take ZAR 315 million in the previous twelve months, another ZAR 158 million, it shows you that we can do it from operations and no new capital required. 2,500 units, being just 2,600 units, serviced, but we're busy servicing another 2,400. That's where the ZAR 158 million went through. So then effectively, we've got 5,000 units ready for development.
No interim dividend declared because the policy is 5% of headline earnings, an annual dividend, and all indications are that the company will be able to pay the dividend at the year-end, resulting in a 6%, 6.49% growth in net asset value, ZAR 14.29. Now, again, first time over fourteen rand, if you go back to pre-COVID, February 2020, ZAR 6.36 per asset value per share. Now at ZAR 14.29, that's a growth of 19.7% compounded over the period. Just showing the impact of share buyback, showing the impact of consistent profit growth over that period. And then last, but definitely not least, Memorial Park, for the first time ever, achieving the goal of covering group administrative expenses with its cash generation, which is a big milestone for us. Softer issues.
This was at the year-end. Most of these graphs are 47% women. Subsequent to that point, we have decreased slightly to 44%, just in terms of how the appointments and the resignations worked. We still have that 50% target, and we'll continue to drive towards it. 41% of our people being trained, that's consistently through the School of Calgro, the mentorship program, the training programs we have in-house and externally, we're focusing on. We're still level one empowerment contributor, and we're still ISO 14000 and ISO registered. Important to us, and CSI spend tilt towards education, 84% to education, 12% towards infrastructure, but it's also education linked infrastructure, typically fences around schools, in adjacent community where the girls are unsafe, new bathrooms, schools, and the like.
We then move to developments, and that picture is a quite important picture. So that's our 32 on Pine development in Fourways, behind the Cedar Square Shopping Center, roughly, I think, 800 meters from there. But the quality, look at the quality, look at the finishes, look at the face brick, look at the jojo tanks, look at the solar panels that's on the roof. Sorry, in that picture, the solar panels are actually sitting on other sides of the roofs. Look at the finishes, the clubhouse, and throughout the presentation, I'll touch on that, showcasing how these houses that sell from ZAR 3.5 million. Actually, we take that same finishes, and we roll it out in our units, which we say we sell at the average of ZAR 636,000.
The important thing in our integrated development is that we focus from fully subsidized to basically through government rentals, social housing, gap housing, which is someone that's too wealthy to qualify for a government grant, but too poor to qualify for a normal end-user bond in normal course. That's where the first-time home buyers finance come in, that first, that sub-subsidy from government, for normal, affordable housing till the higher end. I think the important bit is here, that if you look at the, again, the right side is Pretty Pine. When you look at the finishes, you look at the left side, which is Belhar. Now, that's a cookie cutter. That same unit, not necessarily in Belhar, because Cape Town is slightly more expensive. In our Southwest development, sell for ZAR 599,000.
Look at the finish, look at the platforms, look at it. That's a lifestyle offering. We believe these units, we can literally, and I said the same comment at the year-end results, we can airdrop anywhere else in much more affluent areas, and we'll be able to sell it for a much higher price. We're really uplifting these people. That's Fleurhof, dam in the background, and then on the left-hand side, you'll see the new infrastructure being installed. In the next picture, we'll actually illustrate that better. Parking areas being included. This is services for nine hundred and thirty-two walk-up units, plus seventy-two freestanding houses we completed in September, and we actually started the first two hundred and sixty houses on here, in that exact same finish schedule we showed earlier, but we're very excited on this project.
For the first time, we're going below ZAR 500,000 again for a two-bedroom unit. We've got a lot of design efficiencies in it, a lot of the design and creative thinking. So we're going to start again from ZAR 400,000-ZAR 499,000 for a two-bedroom unit, but then really for the first time ever, a one-bedroom for ZAR 399,000, or from ZAR 399,000. Yes, the first question is, Calgro always focus on the families. Correct. The challenge is that everyone wants a big house on a big stand. Not everyone can afford a big house on a big stand. If you go into town, they're enclosing balconies of 4-5 square meters. They're renting it out for ZAR 1,500-ZAR 2,000 a month.
If you go into Randburg, Windsor, many areas in Cape Town, they take a house, a three-bedroom house, there's another three living areas. They can close the living areas. They rent it as a six-room house. Each room gets rented by a family for between ZAR 3,500 and ZAR 4,000 a month. They share a single bedroom and a bathroom and a single kitchen, and that they rent for between ZAR 3,500 and ZAR 4,000. Our one bedroom will still be of way better quality, way better finishes, and a way better living standard than what that is, and that you can now buy for under ZAR 400,000, and that, combined with interest rate decreases, we forecasted. The current 25 basis points had no influence on the market yet. The market is definitely under pressure.
So if you take a ZAR 600,000 end user bond, 25 basis points is ZAR 250 a month in decrease in your bond installment. That's too little to make an impact. A combined 100 basis points is basically ZAR 920. That's starting to make an impact. Our forecast is, I'm gonna talk, speak of my head and heart. My heart tells me that we need 50 basis points, but my head tells me I'm only going to get 25 basis points. But we also should get, easily get another 50 basis points in 25 basis point increments during next year. In fact, we have to get up to 100 basis points next year.
That, combined in with going lower in the market, capturing this, what we've said for a long time, this big housing backlog, and then we don't sell enough. So how can we say the housing backlog is so big? It's because we believe that after a lot of research now, we're not capturing with the lower LSM levels, where the real shortage of housing is, and that will have a real impact. Consumer market definitely under pressure. We're doing all of this because the consumer market is under pressure, and we want to capitalize on the market. The sales are under pressure. You can see that ended over 869 versus 1,193, the previous comparable period. Revenue is down to ZAR 507 million from ZAR 688 million.
But what is not in that number is the contribution from joint ventures or the joint venture revenue. That's up 175, 275 million from 23 million. And that you'll see lower in the income statement, the contribution from JVs and after-tax basis now being 20 versus ZAR 4 million, all contributing to the net bottom line. How do we get to the GP margin? So the GP margin is 27.86%, up from 26.62%. And I said earlier, the group 29% is more driven by the memorial parks. I'll get there, but this 1% is still material. So the development cycle, as you acquire that. Fleurhof was acquired in two thousand and nine, well, two thousand and eight, commencement two thousand and nine. Jabulani was acquired in two thousand and ten.
South Hills was acquired two thousand and fourteen. Belhar was acquired two thousand and thirteen. Scottsdene was acquired fourteen. Scottsdene was acquired two thousand and twelve. Remember, we don't revalue these properties. Then we went through cycles of installing the big bulk and link infrastructure, and specifically in the last two, three years, when we had big operating capital, and we're very good in generating this cash. We completed this infrastructure in the build-up to the Frankenwald development, so that we don't have multiple projects demanding capital, and we can really focus our capital resource, financial capital, specifically in this instance, to the Frankenwald development. Therefore, even the current, where we just service this internal infrastructure, the bulk and link for this was installed in the last three, four years. It haven't taken account of the 12% construction increase on an annual basis.
So it's a lot cheaper on my balance sheet. The land is old on my balance sheet. Now, as we stand here today, we haven't had any public sector houses under development. So all these houses are the man on the street buying a house from us. So that's at ZAR 636 average sales price, which is higher than the typical government or public sector housing we do, social housing. And then all the units are the new design, which is less construction square meters for every sellable square meter. So all of this we've done over the last 7-8 years has now contributed to sustainable higher-than-target margin. And if you look at the results, we commented that in the short to medium term, we expect this number to be above the target of 20%-25% range.
Not just the one-off, consistently should be slightly above this target. We also figured out that the sweet spot is 300-500 units construction. Building our third-party contractors, you have to give them some scale. And I think all of this is attributable to understanding of the lower LSM groups. Where do we need to pitch the market? Where is the big demand, and how do we--how much can we sell at any given stage? How much do we have to have under construction? So a lot of things coming together, giving rise to this margin. Just the numbers, I'm going to quickly. I think I've mentioned all the numbers by now. 1,539 under construction, 800 units of which we explicitly state a large part will be handed over before the year end.
Remember, we account for revenue on transfer to the consumer, when we also get our money. To my earlier comment, cash flow and revenue is very closely aligned. 869 handed over, so that's cash in. 1,592 to be started in the next six months, so that we've got revenue for the next six months. Fully serviced opportunities, 2,609. We basically have spent under ZAR 58 million, but if another 10-20 million ZAR, that will have another 2,416 serviced opportunities. In total, 5,021, of which we will now utilize 1,592. Just remember, it's not these numbers have to be, it all forms part of one another.
We increased the pipeline of 16,000 units, so how could we increase to 16,000 if we say at the bottom, we've added 20,000 on Frankenwald? So we added 20,000 on Frankenwald. We added two and a half, land for 2,500 on Fleurhof, and the reason for that is that we don't at any stage in the future want to have Frankenwald as our only project. We want sustainable projects. So we added to that, that's 22.5, but we subtracted, and we put Witpoortjie up for sale for 6,100, and that's the balance. Back effectively, 16,000 increase and 37,000 opportunities added through all of that.
In rand terms, 16 declared the previous time, minus ZAR 3 million, 16 million pipeline, minus 3 is 13, plus the 18, plus the 2, and that gets you to your ZAR 33 billion pipeline combined. Frankenwald. I'm not going to touch what's on the slide. The main thing with Frankenwald is, Frankenwald is on the doorstep of the richest mine in Africa. Frankenwald is bringing affordable housing to the doorstep of Sandton. Frankenwald is there to assist, not just be solely responsible, but assist in unraveling the challenges in Alexandra. Frankenwald is better located than Waterfall, and I know some of the Waterfall guys will then bash me for this statement. It's better located than Waterfall, closer to Sandton, but on the periphery of the new Sandton.
I saw there was a big article yesterday by one of their publications, saying that Waterfall might become the biggest, the next Sandton. It might be correct, but then Frankenwald is affordable housing on the periphery of the Waterfall CBD or business capital. It's close to industrial areas. It will have. 34% of the land will be utilized for infrastructure and specifically recreational, walking trails, running trails, bicycle lanes, parks, sports fields, communal sports fields, all of these facilities will capture 34% of the land. Frankenwald is there not to fill the homes. Yes, ultimately, there will be between 20 and 50 thousand families residing there. Ultimately, there will be, if you look at bulk and link, there's 850 bulk sq m of retail, commercial, industrial to be developed there.
There will be a lot of people working there, but what is it about? It's about connecting Alex, Alexandra, to the rest of the suburbs. Connect the road between Woodmead and Marlboro. It's about creating artisans, training program, taking people off the streets in Alexandra that's unemployed, give them a job on this project. Once they've got a job, they can look after their own families, they can look after their own children. They can take the kids off the streets, so that immediately reduces crime, drugs, all of that. That creates jobs, sustainable jobs, because this is a fifteen-year project. Post this project, there will be a lot of industrial, retail, commercial opportunities where people can work, and then ultimately, it will house between twenty and fifty thousand families.
If you go on an average of five per household, up to 150,000 people in this facility. But this facility is about so much more. This facility or this land must make a real impact and be groundbreaking in terms of what it means for the broader South African context of what integrated houses will look like forward. And that's why this is so fundamental for the greater good of South Africa. The detail on the project, the land is transferred. The money was paid, the ZAR 100 million, our portion of the 200. There's ZAR 250 million to be spent in the next 18 months, of which we have to fund 60%, ZAR 150 million. I've already said enough that we can do it from operations. I illustrated why, I believe.
It increased our pipeline of ZAR 18 billion to ZAR 33 billion, just short of ZAR 33 billion, on a conservative basis of 20,000 housing opportunities. This project should drive South Africa, and really should drive building legacies and changing lives, so the strategy in on the pipeline, in short. Umhlanga is up for sale, KwaNobuhle is up for sale, Witpoortjie is up for sale, and potentially even a part of the ultimate high cluster portfolio. We're going to trade it out, and come see if the spelling errors fixed. I can't read up there. Jabulani was traded out, La Vie Nouvelle will trade out, Scottsdene will trade out, and Fleurhof. Therefore, we'll be focusing on five, maximum of six projects. What are they?
Cape Town, Belhar, Gauteng, or Joburg and surrounds, Fleurhof, South Hills, Frankenwald, and potentially some of the mid-tier properties we can't sell out. Belhar will come to an end earlier than the rest of the projects, so therefore, we're looking for land in the Cape Town, vicinity of city of Cape Town, for integrated housing development. Focusing our financial resources as well as our human capital, very important. If we move on to Memorial Parks, Memorial Parks is about making a difference. Memorial Parks, again, about where do you want to bury your loved one? In a safe, serene, tranquil environment, firstly, where you can feel it's cultural driven. It's starting to prove that risk mitigator, where we always said developments will always go through cycles.
Even if the next downward cycle is in ten years from now, there will be another downward cycle, just because of the pure nature of that business. At that stage, the group will not have to worry about administrative expense operating teams, because that will be taken care of from the cash generated from the Memorial Park business. So it acts as a risk mitigator. Even in the current six months, when the economy is so under pressure and everyone is struggling to sell, this business in terms of banking is up from 54 to 52 million rand. Why? Because of its cultural nature, because of the difference it's making, because it's really providing a product no one else is. Why can't-- Why is there no competitors yet? Because of the capital intensity. No bank will borrow you money.
I know there are some banks in the course, apologies for that. No bank will borrow any business money to acquire that. Calgro shareholders has put up that money, but therefore we're making a difference, but we're also getting the risk mitigation. GP margin 57.1%, but then a greater number is because of the scale now, the critical scale, dropping to the bottom line is 48%, and that's a very important number. Again, we believe we understand this market well now. I've already touched on the 52, up from 34. Lay-by book up from to 40 from 20 a year ago, 21 a year ago, very important number. Total pipeline, ZAR 2.7 billion, just short, 120,000 drives.
Really making a difference, and we trust that this business will continue to achieve its goal of paying for administrative expenses, achieved now for the first time, and potentially future growth of new parks, also be in a position where it can cater for the finance cost of the group. Sayuri?
Thank you so much, Wikus. Good afternoon to everyone joining us today for this results presentation. I'm very proud to present another set of resilient results for the group, and as always, we're going to start with a look at our statement of cash flows. This period, cash generated from operations decreasing from ZAR 149 million at the previous reporting period to ZAR 57.2 million. Now, the reason for that is a couple of things. It's the ZAR 138 million rand, which has been invested in infrastructure within the Belhar, the Fleurhof, and the Jabulani projects. This investment in infrastructure ensures that we are able to successfully roll out that remaining pipeline that Wikus touched on over the next few financial years.
Secondly, in the previous results presentation, I did make mention of the fact that we did anticipate a little bit of a slowdown in operations as a result of the elections within the country. That subsequently has been ramped up. And then finally, just the delay in transfer of units into the open, to the open market consumer. This resulted in a net cash generated from operating activities of ZAR 28.6 million, and I must make mention of the fact that subsequent to the end of this period, the group banked approximately ZAR 200 million in operating cash flows from various projects. Now, moving further down the statement of cash flow and looking in particular at our financing activities.
This year, in this period, we have drawn down ZAR 100 million from our Absa facility to assist us with the payment of our Frankenwald land payment. This payment was made in September 2024, and the land has transferred into the Frankenwald JV. The dividends paid for the period, so in the year, we did declare our maiden dividend of ZAR 10.8 million, and that was settled in May 2024, all giving us a cash and cash equivalents balance of ZAR 168 million, and the group did have available to it, its ZAR 100 million overdraft, which remained undrawn at the end of the reporting period. Moving along to our segmental revenue contribution. Revenue did decline from ZAR 688 million in the previous comparative period to ZAR 507 million in this year.
This was primarily driven from the residential property development business. Now, when you look at the residential property development business, one needs to consider the revenue that was generated within the joint venture companies, which we are a partner to. If you look at the graph on the slide, revenue has increased from ZAR 23 million to ZAR 175 million in our joint venture company, mainly attributable to the units transferred in our South Hills development in the current reporting period. Memorial Parks has seen an increase in revenue from ZAR 19 million to ZAR 31 million, and that's on the back of really successful marketing campaigns, which has resulted in increased on-demand burials as well as completed lay-by sales. Looking further down our statement of comprehensive income, Wikus has touched on the gross profit margin of 29%.
, 29% being higher than our target range of 20%-25%. And the reasons for that are, as he mentioned, the property development business benefiting from that historic land and infrastructure costs, as well as very good performance out of our Memorial Parks business from, increased sales. Administrative expenses has come down from ZAR 49 million in the comparative period to ZAR 48 million in this period. This is on the back of that reduction in our admin costs in the previous financial year, showing our continuous commitment to cost containment and management. Share of profit of joint ventures. So I've mentioned the increase in the revenue from the share of profit of our joint ventures.
That has filtered into this particular line, and gone from ZAR 4 million to ZAR 20 million in the current year, all giving us a profit after tax of ZAR 97 million. I'm gonna move on to our statement of financial position. Our total assets have increased to ZAR 3 billion, with construction contracts still remaining that largest contributor at ZAR 1.4 billion. Within that number are the units which are under construction at the end of the reporting period. Looking at equities and liabilities, I have touched on the movement in borrowings. Borrowings have increased to ZAR 1 billion on the back of that strategic draw of ZAR 100 million from our Absa facility.
While we're looking at borrowings and moving on to its maturity analysis, you can have a look on the slide, the maturities over the next five years. It's pretty much in line. Of the 211 million ZAR, which was to be drawn, which is to be settled in the next six months, 50 million ZAR was already settled in September 2024. And then finally, having a look at our regulated covenants, our net debt to equity ratio was 0.63, which is stable, in comparison to the twenty-eighth of February 2024 number. Debt service cover ratio was now reported at 3.4.
The reason this ratio has increased a bit higher than previous reporting period is as a result of the debt settlements occurring in the second half of the financial year. We do anticipate that this particular ratio will trickle down as we get to the end of February 2025, and that is all from me. Thank you so much, and I'll hand it back to Wikus.
Thank you, Sherry. Okay, so where does it leave us? We have lots of land. We decided which project we're going to sell, which is in Umhlanga, but partly KwaZakhele, primarily to generate a lot of cash, liquidity. We're going to trade out Scottsdene and Jabulani, La Vie Nouvelle Retirement Village, which is picking up nicely now. You don't remember, it's been with us for a while. Very, very challenging and very frustrating project, and very divine. Through that trade-out, we're going to generate. We set up between 24 and 30 months. We're going to generate a lot of capital. We invested a lot in bulk and link infrastructure during the last. Let's call it 18 months, ZAR 315 million plus ZAR 138 million. So maybe I must just...
Sorry, I said earlier, I'll get to the bulk and link infrastructure and it slipped my mind. What bulk and link infrastructure is, it's your main connector roads, it's your main bulk water reservoir, if that water reservoir is needed. It's the link line from the water reservoir to the project. It's the electrical substations to distribute the electrical capacity. It doesn't generate power, just to be clear on that. But it's basically a distribution center of electricity to these projects. It's the link line, which is normally a ring feed with even a switching station. People think a switching station these days costs between ZAR 60 million and ZAR 70 million. That's in. If you take Fleurhof to date in its entirety, Fleurhof was started at 6,000 units.
Today, sixteen thousand seven hundred and seventy-eight units, nine thousand two hundred of them delivered, meaning that we've got just over seven thousand units left. And Fleurhof total, let's call it all these infrastructures required, is a further ZAR 20 million. Therefore, very little capital to be spent, with lots of units to be sold and lots of cash to be generated. The same will go for Frankenwald. Why is Frankenwald such a great project? Because Frankenwald, and again, I might be lambasted for a silly statement, Frankenwald benefited from a lot of infrastructure that was over the years installed for Sandton as well as Waterfall. And Waterfall benefited us severely with water treatment plants in the Alexandra, water infrastructure, and the like.
So very little, if you look at the ZAR 250 million capex size for a lot of retail, commercial, industrial, as well as just short of 6,000 units in the first. Actually, up to 10,000 units from a civil perspective. If you look from that perspective, it's very, actually very little per opportunity, but because of that benefit. So why I'm highlighting these factors. Oh, sorry. Then we've also already, Sayuri said we increased, we drawn the Absa facility of 100, but 50 million has already been settled off the debt post the reporting period. So the debt, net debt equity is actually slightly down at this stage as well. A lot of liquidity to be generated, limited capital to be spent. The capital can. Financial capital to be spent.
The financial capital can be concentrated towards the new Frankenwald project, which is going to be a big revenue driver, and that wasn't coincidental, that on the revenue slide, Frankenwald was at the bottom. If you flick back to slide three. Okay, sorry, four. There. That's a Frankenwald project between the M1 and the M3 from Woodmead to Marlboro. So the group is on a very solid operational position, left align where its financial position is, left align through the detailed numbers Sayuri went through, where there's currently good liquidity in the group, where there's currently a solid balance sheet, where the net asset value per share is ZAR 14.29, up 19.7% compound over the last few years, where the post the share buybacks is 26% over the last 24 months. So effectively, we well set and diversified through these five, six projects.
We decide what we want to sell. We set for growth. Positive cash flow, and I've said, there's a lot of liquidity in the system that will keep driving that. Memorial Parks, we've got confidence in, and you'll see it from the numbers. The confidence is resulting in good financial numbers. Our product offering is superior if you look through the photos, and you go and look at any of our competitors out there. So value for money offering is important. Why is value for money offering important? Because the banks are still granting us 100% bonds on all our products in the entry-level stage, up to ZAR 850,000. Minimal deposits requirements, very important, because someone buying a ZAR 600,000 home do not have ZAR 60,000 for the deposit.
Very important, and that's where our market insights come in. We've up-specced that product to be the best in class in terms of value for money offering. Balance sheet strength, I think, speaks for itself. Digital innovation through ourselves and different efforts, and if you look at our sales numbers compared to a lot of our competitors, yes, we down in terms of sales, but we still done better than the market norm. Performance outlook for the next two years, you saw 1,539 under construction. We indicated a large part will be transferred in the second six months of the year, second half of the year, and then capital allocation speaks for itself over the years with a lot of focus, not only financial capital, but also human capital, and that will continue to be driven forward.
So, core message, and I said earlier that Renkya is in the room. He have joined us today. He has been in the group from the beginning of September, and he's aligned to the strategy. I just want to. Might there be operational changes? Yes, but the strategy going forward will stick to the plan, stick to business, continue to build legacies and changing lives, be innovative in terms of product offering, but do not forget to listen to our clients. Because our clients' needs change from month to month, year to year, what they want, what they need. So stick to the plan, but listen to our clients. And then I want to start this, this is the first slide I started with, as a core message. I actually want to start on the right-hand side with financial health.
Because we have the financial health, because we have the balance sheet, because we have the sales, because we have sales with interest bonds in place that will drive liquidity, we are able to grow, which is the middle. Whether it's through organic or new acquisitions, but the intention is not to acquire more land. I think we've got enough now, except for Cape Town, where we have to fill Belhar because it comes to an end earlier. It will be organically roll out these projects in a growth phase. And because we have financial health, because we have this growth, we will listen to our clients, we will be adaptable, and therefore, we will continue to drive to be the best-in-class value for money offering. Thank you for your time. We'll be taking questions.
All right. Sorry, the first question is, congrats on the maiden dividend. The EPS cover of the dividend is quite wide. Can you talk through your decision for this dividend cover ratio relative to the potential decision to apply the capital to buying back more shares?
Yeah, so it's not mutually exclusive. So you'll see that. So share buy... Capital allocation has a few parts to it. Firstly, I said a few times, it's a cyclical business, so we need backup capital. So we need to make sure we generate sufficient liquidity to drive backup capital. Then if we have investable capital, we need to look after the growth in the business, and there's two sides to it. You can't say, "Stop growing because it's better capital allocation to just buy back all the shares." Your problem then is, it is my respectful view that we've built the best-in-class team in South Africa for affordable housing, and these people need to be stimulated. And the moment you stop growing the business, you stop stimulating them, they'll leave. And then you have to bui- you have to rebuild that, so you lose that capital.
So you have to keep them stimulated. Then you have to look at share buybacks and then return cash to shareholders as well. So none of them are mutually exclusive. They all get put on the table when we discuss capital allocation.
The next question is, the average unit price looks to have fallen 20%. Was there a strategic reason for that, and how might that change in the second half?
I don't think it fell 20%. I'll go and check. I should think it increased. Okay, I'll go and check that numbers. The current average sales price is the price across the units, and remember, a lot of the second six-month units have already been sold, so yes, it will remain consistent. On the 20%, whoever asked the question, we'll check, and I'll get back to you.
Calgo holds ZAR 575 million in non-core projects, representing over 50% of group debt and 90% of the market cap. Has the improved political and economic outlook increased interest and the likelihood of an exit within the next 12-18 months?
Yes, that's a loaded question. I would hope so, yes. Remember, sale of these projects, so if you sell anything for ZAR 200-300 million these days, it's not quick. So there are interests, but now the challenge is to close those deals. Funding takes long. Even if you look at commercial deals these days, the banks, and again, I know there's some banks on the call, but that due diligence period for if you buy a retail shopping center in the past have been 50 days, that increased in 90 days in many instances. So that periods have started increasing, but we do believe we'll be able to sell that. Just the prices of that will again go through the capital allocation decision, which I've explained earlier.
So they won't just all settle debt or buy back shares, just to be clear.
If debt to equity covenants ever got close, could you not just revalue land at cost on your balance sheet closer to fair value, thus bolster equity, and thus manage any risk to covenants by this process, i.e., what the REITs do?
Yes, I'm leaving, so I can't make the statement I would have made. So I would have made the statement that the moment we have to do that, we've mismanaged the group. But now I'm leaving, so I'm gonna look at them sitting over there, and that would be unfair, but I hope, I hope that the group never gets there. And to be clear, through the worst periods in 2017, 2018, 2019, for all the land invasions, for all the unit invasions, for all running out of infrastructure, we've never got there, where we were forced to revalue those assets. I believe it's fundamental that we don't revalue it, because revaluations are always open to judgment, if I can call it that, and there's various judgment calls being made on that, and interpretation. That's firstly.
the thing is, you are currently now benefiting from the historic land cost for the GP margin that goes through HEPS, and revaluations get reversed for HEPS. You're actually destroying future HEPS by revaluing property. Just bear that in mind from accounting treatment as well.
Then, share of profits from JVs was up significantly year on year. Can you talk about the outlook for the South Hills joint venture going forward? In the commentary accompanying the financial year, 1,539 units are under construction, with the majority to be completed by the end of February 2025. What should we infer from this with regards to the second half of 2024?
Okay, there's two parts to the question. So let me address the second part first. I think what we wrote there is might be clear, so I'm not gonna give better guidance because that will result in forecasting. A large part of that will result in unit completion and unit handovers, which will result in revenue, and that you can make whatever is, that's there. Then if you look at the South Hills JV, so South Hills went through a quiet phase where there was a lot of bulk and link upgrades required. There was also some community challenges, all resolved at this stage. So South Hills specifically benefited from units that was completed. There's still quite a bit that must transfer in the second half, so you can mostly expect similar results in the second six months.
Then you still have service opportunities in South Hills, which the group will benefit from in the next year. And then you also have started on what we call... This was the eastern side. So they actually have two sides. So the western side, we're commencing bulk and link infrastructure. We're progressing well with bulk and link infrastructure on that. So you can expect South Hills JVs to continue to contribute greatly to the group operations.
Will you need to raise debt to fund ZAR 150 million Frankenveld cost, or can it come from internal cash flows?
What I tried to say in my presentation is that in the previous 12 months, from operations without increasing debt, we've half-funded ZAR 350 million. In the current 6 months, without increasing debt, because the ZAR 100 million, so you already said, was raised for the Frankenveld land. So actually, ZAR 150 million in total, including the VAT, as well as we've already settled ZAR 50 million of that from operations in the last 6 weeks. So I think that should indicate that it's our intention to fund all ZAR 150 million from cash from operations. Sorry. However, going into a new project, there is uncertainty, so there might be debt raised just as backup capital to cover the risk of uncertainty.
The next question is also Frankenwald-related, two parts to it. How many opportunities will be serviced in Frankenwald through the first phase, ZAR 150 million bulk and link infrastructure investment? And the second part of the question is, what's the investment in top structures for the first phase?
Okay, the first 150 will specifically service just short of 6,000 opportunities. However, it enables 10,000, so there's little infrastructure needed to go from 6,000 to 10,000. So maybe just to be clear on that, so the 150 doesn't only service 6,000. It actually serves a lot of the bulk and link, which is for the whole project. That connector, the one sub-connector between Woodmead and Marlboro will be constructed. The link water lines will be constructed, which will not benefit only the six or the ten, it will also benefit the project as such. So that's from an infrastructure perspective. I think that second phase to get to the ten is roughly another ZAR 43 million or ZAR 46 million. Then if you look at top structures, that's undetermined at this stage, and I'll tell you why.
We are looking at ways to fast-track return on capital or increase return on capital. We might not be constructing all the units on that project. We might, for the first time, in Calgro's history, we're looking at not only there, there's other places as well as potentially selling service opportunities to third-party developers, because you, the most of the value, if you look through our value chain, is actually created by acquiring land, take it through a rights process, environmental, town planning, urban design, architecture, set out the blueprint, install the bulk link infrastructure, install the internal infrastructure. There's actually very little margin in the top structure. The top structure, in many cases, is just a conduit for the sale to get your land and infrastructure money and the margins back. So we are looking at that.
So it's undetermined, and that will be assessed by the group through the next six to twelve months. Remember, from a top structure perspective, so if we start bulk infrastructure in the first quarter next year, that will finish in the first quarter of 2026. If we start top structure in the first quarter of 2026, the first unit should be handed over December 2026, but realistically, February 2027. So there's still some time to do that decision strategically.
Then please expand on the issues at Nasrec Memorial Park?
We acquired land with full rights in place, or so we thought. There's a technical dispute whether the ROD, so Record of Decision, that's what ROD stands for, is an environmental law term. That means post achieving your rights, you have X amount of months to activate your record of decision on environmental approval while breaking ground. The previous land owner indicated to us that land was broken. When we got 70% through the infrastructure, the municipality environmental department approached us and said that they do not believe the ROD was activated because they had to get notice of it. We couldn't find the notice, and therefore, we now going through that environmental process.
We had one or two choices: either go legal, because we believed that we most probably could have proven that it was activated through aerial photos and the like, which we have. But that process, sometimes that negative energy, plus the conflict, plus the legal costs, costs more time and effort than it just is to wait, so actually going to look at about six months, so within the next six months, it will be recommenced through the normal process. Could it be maybe been a month or two earlier with a legal route? Yes, but we didn't believe it's worth the fight.
All right. The next question is a technical one, so I'm not gonna pose it. We'll answer Nick, we'll answer your question directly. It's about changes in working capital, which you're not gonna with you right now, so I'm gonna jump over that, then the next question is, can you speak about the trends in building costs? What's the current building cost per square, and how has this changed?
I believe that's my market advantage. So I'll talk on the trends. I'm not going to go what our specific construction cost is, because it's got a lot to do with how we design the foundations, how we design the walk-ups, how do we design square meters, how do we design our building designs, where there's a lot of IP locked up in. So I'm not going to go too specific, on that, but effectively, construction cost at this stage is the increase in construction costs, which two years ago, was 13%, last at 12.1%, is slowing down. So at this stage, it's sitting at roughly 8.5, 8.6%. We are managing it through not building 200 units on a Stand between 300 to 500, and the biggest reason for that is your P&Gs.
So that's effectively your site supervision, your equipment, on to all the utilization of your equipment on site. We can manage better the more we build on scale, and therefore, our contractors are able to give us prices that doesn't reflect the 8%. We're actually below that at this stage.
What's the current % free float in your shares?
I've absolutely no idea. We'll get back to you.
The next question is-
Sorry, may I just... It should actually be quite a lot, because, the founding members, with the exception of Deon Steyn, been there, they've sold their shares, and they haven't their shares in the last sixty-nine months, and that will always your anchor. Then there is some funds that's not actively trading, but I'll get back to you. But the free float should be actually quite a lot.
There's about one or two mining projects in the vicinity of your Fleurhof development. Are any of these potential future sources of income, in terms of lease agreements or other royalties, where such projects are located on your land?
Yeah, so I think we would now have to be careful. So we can't, on the one hand, say, building legacy is changing lives and doing good for the community and enhancing their lifestyle, enhancing the place they live in, not building houses, which is just merely a roof over your head, but really building a home, which a lifestyle choice, and the other side have mining activities on the property. So if there's mining projects that have no influence whatsoever on our current development, which is shielded by mine dumps, which no one see, we'll look at it, but on the property, in the vicinity of our housing units, I don't believe that carries the values which Calgro stand for, even if there's money to be made. Remember, our core business is homes and memorial parks and lifestyle offerings.
... New designs are benefiting, the construction square meter per sellable square meter. What's the three-year trend?
The three-year trend to date has been, we've decreased walkway, staircases, non-sellable area from 27% to just over 16%.
Then your 26% share buyback is one of the greatest capital allocation decisions in the history of the JSE. Well done. Even though the shares are up over 180% since then, they remain extremely cheap. Why were there no repurchases during the period, and what quantity of repurchases can be expected during the remainder of the fiscal year, given the strong financial position of the group to which you refer?
Okay, so, so let's address the period first. There was no purchase of the buybacks because we went through extremely difficult economic scenario, which can be seen in our sales. So although we ended on robust results, you never knew when sales were going to come off a cliff. And luckily, touch wood, it never did. But they are under pressure, and we had to work a lot harder for our sales, so we had to keep backup capital for that. Then in the build-up to Frankenveld, I believed that the ultimate return over the next 15 years in Frankenveld will be much greater than return on buying back cheap shares at this stage. So that influenced it. So the ZAR 100 million for the land, or ZAR 115 million, as I commented earlier, for the land, was more important.
Then, alongside that, we wanted to sustain operations, to my earlier comment, get the capital investment of our current projects out of the way, so that we can focus on Frankenwald solely, so there's no pressure in future working capital. Because what happens and, and what I've seen in instances, is where people have such aggressive buyback programs, and then they run into liquidity problems within a twelfth year period, twelve-month period of time. So for that specific reason, there wasn't buybacks in the current six months. In the next six months, it's a capital allocation decision, which we consistently are debating. In fact, I've debated same with Ben-Pierre earlier today. Sorry, not with Ben-Pierre, with Warren, to say, "Is it not an opportune time?
The shares started running, but they started coming back to do more," and we'll continue to evaluate that based on our capital allocation matrix, which doesn't only look at short-term returns, although it's permanent in nature. It's permanently accretive share buybacks, but also taking into account the business and operations.
Then if we use Calgro's share repurchase IRR of 30% as a benchmark for evaluating capital allocation options, how do the returns from the 2,500 additional opportunities in Fleurhof compare?
You cannot only look at financial returns. So Fleurhof of that, so 2,500 is an option agreement, so we actually haven't laid out the capital yet for it. We're doing a small option fee until the rights are in place. But let's say we have paid, so if memory serves me well, we're paying 26 or 27 million for 2,500 opportunities, so that's 11,000 ZAR opportunity for land. Now, if you compare that to what other players in the market are paying, I think it's extremely affordable, and returns will be greater than 30%. But let's say those returns weren't greater than 30%, just for the principle of this argument, and we're at 25%. I still believe it's a better investment, taking a balanced approach at this stage from a risk perspective.
Because what the group do not want to end up in five years' time is that Fleurhof is traded out, Cycles is traded out, Belhar is traded out, and its only project is Frankenwald, which is right next to Alexandra, with a lot of socioeconomic challenges. If that project gets stopped, the group stops 100% of its revenue in its tracks. We need to make sure that we never end there. Remember, going back to 2017, why did those invasions of Scottsdene, and within three or four weeks, not having power on Fleurhof affected us so much, and nearly costed us the group and the full sustainability, because we had 76% of our revenue between those two projects. That nearly cost us the group.
With that in the back of our minds, this group must never have concentration risk like we had back then, and therefore, balancing diversity and concentration risk, to me, is more important for sustainability than, again, necessarily only looking at financial accretiveness and long-term accretiveness of share buybacks. Share buyback is a balanced approach, is good for a business at the right time, taking into account that all risks have been assessed and not only returns. Okay. Any other question? Nothing?
No.
Okay. There's no other questions. May I make use of the opportunity to say thank you. I started off by welcoming a lot of people. Maybe looking at firstly saying thanks to every Calgro staff member. Not this, nor any of the previous results, nor trading through the worst trading periods in Calgro's history between 2017 and 2019 would have been possible, it haven't been for our people.
So firstly, from my side, thanks to our people, thanks to all the shareholders, and very specifically, debt providers that didn't just dump us and stuck with us through the difficult period, stuck with me personally, and made it able and enabled me today to be able to walk away end of December, which what I believe is a very sustainable, very strong business that can really continue to build legacies and change lives for a very long period to come. So from my side, thank you, and have a great day. If there's any more questions, please, as always, drop us an email and we'll respond to you. Thank you.