Stephen Brookes’ Balwin Properties posts $8.1 million in mid-year profit as apartment sales recover in South Africa

South African homebuilder Balwin Properties has posted R117 million ($8.1 million) in profit at the end of the first half of its 2021 fiscal year, as profits surged by 44.3 percent compared to last year owing to higher apartments sales.

Despite the disruption from the COVID-19 pandemic and difficulties in housing segments, the South Africa-based property developer delivered double-digit growth in earnings as it continued to leverage the economy’s strong recovery and a higher demand for apartments in the country.

The strong apartment sales enabled Balwin to deliver 1,261 apartments to clients in the first half of 2021, up from 896 apartments during the prior year.

As a result, revenue grew from R930 million ($64.4 million) in 2020 to R1.312 billion ($90.8 million, while profit rose by 44 percent from R81 million ($5.6 million) to R117 million ($8.1 million).

Balwin Properties Founder and CEO Stephen Brookes said the company’s financial performance reflects a pleasing recovery from the challenging market conditions experienced as a result of the COVID-19 pandemic.

“Operational activity has steadily recovered to pre Covid-19 levels, supported by the sustained demand for apartments,” Brookes said.

Information contained in the half-year report revealed that the growth in revenue was due to its Classic Collection,* Green Collection** and Signature Collection*** development brands, which delivered strong performance for the period.

The Classic Collection continued to provide the majority of the group’s revenue at 65 percent, down from 76 percent last year, while the Green Collection contributed 18 percent of the total revenue from apartment sales. This is up from the 10 percent that was recorded last year.

A brand comparison revealed that the Green Collection overtook the Signature Collection in terms of revenue contribution, with the latter contributing a balance of 17 percent, up from 14 percent.

The group expects the contribution of Green Collection real estate developments to continue to rise in the forthcoming financial year in line with the increased roll-out of these properties.

Balwin is a residential property developer of large-scale, sectional title estates for South Africa’s low-to-middle-income population. The group provides high quality, environmentally efficient affordable apartments with an innovative lifestyle offering for residents.

In line with its resilient financial performance, the board declared a dividend of R0.074 ($0.00484) per share payable from its income reserves on Dec. 13.

As of press time, Oct. 20, shares in the South Africa-based group were trading at R3.69 9$0.2554) per share, 5.14-percent lower than its opening price this morning.

At the current price valuation, the market value of Brookes’ 36.08-percent ownership interest in the property developer is valued at R629 million ($44 million).

*The Classic Collection is Balwin’s core development model the apartments are targeted at the country’s growing middle-income market with prices ranging from R699,900 ($48,494) to R2,249,900 ($155,874).

**The Green Collection targets slightly lower income consumers than the Classic Collection, the Green-branded developments offer apartments priced from R499,900 ($34,626) to R1,099,900 ($76,195).

***The Signature Collection houses elite developments across South Africa. The apartments are built to higher specifications with luxurious finishes, priced from R1,299,900 ($90,064) to R2,999,900 ($207,860).