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Calgro M3 and Esor partner up

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Contributor
Now I see Esor has formed a partnership with Calgro M3 for low cost housing. Calgo has had great success here (see their share price) and I think it is a good strategic move for Esor. The results were also released and were as expected. I think it is time to stop the panic and put your shares at the bottom of your drawer and watch the action. I see the share price is also going in the right direction. I am positive as always!
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14 REPLIES 14
Valued Contributor
no, ESR is doing this because they are desperate .. CGR the clear winner here while ESR remains in very serious trouble .. an yes I own CGR
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Super Contributor
I can imagine Jamie Carr who writes Diamonds and Dogs in the FM could have a ready-made article here when he sees these two have joined forces.
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Not applicable
why is this good for Calgro - they were already doing well, why do they need to bring on junk into their balance sheet?
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Contributor
Prehaps a little desparate, but huge upside for Esor surely? No huge financial commitment. Over a billion in turnover on a project that will have to repeat itself several times to even come close to helping on the low cost housing demand side. Calgro obviously sees upside or why would they get involved? No doubt Esor is strugling, but I think this is a great step towards surviving and thriving into the future. As always, time will tell.....
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Valued Contributor
it not a junk project but any stretch .. it just a project ESR can't do for a bunch of reasons ..
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Valued Contributor
ESR just gave away half a multi billion rand project for R500 (no typo, it five hundred Rand) .. I only buy winners and ESR ain't ..
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Super Contributor
Is that what they are now sharing with Calgro, Simon?
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Contributor
I really don't think Esor has the money to tackle that project alone. If you like Calgro M3 and they partner up for this housing project with several more to come, don't you think giving away half of this business to Calgro is a good strategic move on Esor's side? Always partner up with a winner with good historical results in the field you want to be in. I also went through the year-end results. Without the loss-making contracts, Esor would have had HEPS of 10.1 cents per share. Not trying to justify my decision to hold onto my Shares Simon, just saying......
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Valued Contributor
sure, problem is they did have loss making contracts (as does the entire industry) .. an they sold the crown jewels .. but here's a fun fact, Esor is the founders grand mothers name backwards ..
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Contributor
Hehehehe! I like that name story. Are you of the opinion that the company has zero chance of survival or just really negative of their chances? I do have a pretty big holding here and am prehaps a bit too confident, but without loss making contracts the next year, they should show some sort of profit. Even HEPS of 6 cents putting the company pesimistically on a PE of 6 should give a share price of close to 40 cents?
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Valued Contributor
they are struggling to survive in a very tough sector .. maybe they will, maybe they won't .. for me I dislike the sector and the stock ..

the issue with loss making contracts, how certain that there won't be any next year ?? loss making contracts has become the hall mark of this industry (well that and corruption)
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Contributor
Hey Simon. I can't dispute logic. I just feel the Calgro deal is actually good news in the long run. Giving away R500 million now to survive and gain billions of contractual work in the future not to mention getting into bed with a partner boasting an extremely successful history in this exact field. I know loss making projects are always a possibility, but I can only hope they are more careful with future contracts. I have 700 000 shares and paid a lot more than current share price! I guess I will just wave my optimistic flag and face north. Selling now and pulling out R175k seems like a hasty retreat, but sometimes I think this might be wise? Thank you for the communication. Always good to get a look at shares from another angle. One day we can discuss my Murray and Roberts holding!
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Super Contributor
Newbie, if you look at the live action, the sellers are falling over themselves right now. They may push the price further down to offload and if you join them with 700000 that might guarantee it. On the other hand once they get out, there are still buyers even if fewer and if the price starts to tick up that can stimulate interest to push it higher. To me Esor is on my gamble list and I have taken a chunk as that but I accept they are dangerously cash strapped and that could be their sinker. Not sure to what extent Vunani are bank rolling them!
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Contributor
Hey there. I think the same as you. If they survive, from this price the could become a 10 bagger. Optimisimn rules. I follow this share closely, so If I get any info I will be sure to pass it on to you.
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