Latest news with #BalwinProperties'
IOL News
12-05-2025
- Business
- IOL News
Balwin Properties reports significant uptick in apartment sales as interest rates decline
Balwin Properties' De-Aanzicht Milnerton, Cape Town. The group delivered a strong rebound in sales and financial performance in the second half of its financial year to February 28, 2025. Image: supplied Balwin Properties, a prominent developer known for its environmentally efficient and affordable apartment estates, has announced a remarkable rebound in property sales during the latter half of its financial year. Following the commencement of a new interest rate cutting cycle, which has seen rates reduced by a total of 75 basis points since September 2024, the company reported substantial improvements in trading conditions. In the six-month period leading up to February 28, the company recognised revenue from the sale of 1 109 apartments, a significant increase of 73% compared to just 640 units sold in the first half. Additionally, pre-sales surged, with 814 apartments being contracted for future financial periods, up from 520 the previous year. Group CEO Steve Brookes attributed this increase to heightened buyer interest driven by the easing of interest rates. 'The year under review was a tale of two halves, with a strong recovery in profitability in the second six months of the year, supported by ongoing cost-saving initiatives and a strong performance from the Balwin Annuity,' Brookes commented. Despite this positive trajectory, while the interest rate relief was a welcome development, it fell short of expectations, and further interest rate cuts were anticipated for the new financial year. The company's monthly average gross sales rate surged by about 30% since the start of the interest rate cuts, positioning Balwin to expedite construction activities as market conditions improve. Even amidst a challenging economic landscape, Balwin reported an 8% increase in taxed profit to R234 million, with group revenue standing at R2.2 billion—a 6% decline from the previous year, reflecting ongoing pressures in the residential property market. The anticipation surrounding the Government of National Unity formed in June 2024 was overshadowed by political uncertainty, amplified by global economic volatility. Nevertheless, earnings per share experienced a modest increase, rising to 49.74 cents, while headline earnings per share slipped 4% to 45.95 cents. To adapt to the challenging market conditions, Balwin implemented measures to align construction rates with sales, which included better cost engineering, ongoing marketing, and incentives, as well as strict control over operating costs, which remained steady at R351m. The company's gross margin did improve to 30% from 28%, buoyed by contributions from its annuity businesses. Focusing on regional performance, Gauteng emerged as the largest contributor to revenue with 856 apartments recognised, while the Western Cape demonstrated strong demand, with 801 apartments contributing to the sales figures—an impressive 99% of market offerings in the area were recognised in revenue. Despite a subdued performance in KwaZulu-Natal due to planning delays, management expressed optimism for future improvement as progress is made on these challenges. Balwin's directors expect further interest rate cuts will likely stimulate a gradual recovery in the residential property sector. The company is committed to maintaining operational and development cost containment strategies to bolster profit margins and maximise returns on invested capital. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ With a robust pipeline of about 36 000 apartments slated for development over the next 12 years across major metropolitan nodes, Balwin'sdirector said the group is poised to emerge more efficient and focused, optimising operational processes for improved profitability.
Yahoo
07-03-2025
- Business
- Yahoo
Balwin Properties' (JSE:BWN) Returns On Capital Not Reflecting Well On The Business
If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. However, after investigating Balwin Properties (JSE:BWN), we don't think it's current trends fit the mold of a multi-bagger. Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. To calculate this metric for Balwin Properties, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.039 = R215m ÷ (R7.7b - R2.1b) (Based on the trailing twelve months to August 2024). So, Balwin Properties has an ROCE of 3.9%. Ultimately, that's a low return and it under-performs the Consumer Durables industry average of 9.3%. View our latest analysis for Balwin Properties While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you're interested in investigating Balwin Properties' past further, check out this free graph covering Balwin Properties' past earnings, revenue and cash flow. When we looked at the ROCE trend at Balwin Properties, we didn't gain much confidence. To be more specific, ROCE has fallen from 20% over the last five years. Given the business is employing more capital while revenue has slipped, this is a bit concerning. If this were to continue, you might be looking at a company that is trying to reinvest for growth but is actually losing market share since sales haven't increased. We're a bit apprehensive about Balwin Properties because despite more capital being deployed in the business, returns on that capital and sales have both fallen. And long term shareholders have watched their investments stay flat over the last five years. With underlying trends that aren't great in these areas, we'd consider looking elsewhere. If you want to know some of the risks facing Balwin Properties we've found 5 warning signs (2 are concerning!) that you should be aware of before investing here. If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
