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Business Reporter
Listed property concern — Mashonaland Holdings Limited says revenue for the four months to January 2018 softened by 3 percent to $1,58 million as voids rose to 29 percent.
During the same period last year, voids were at 27 percent. Despite the revenue reduction, operating profit for the period improved by 10 percent to $711 988 and 8 percent ahead of budget.
Operating profit margin also increased to 43 percent from 38 percent in the prior year, although it deteriorated from 50 percent for the year ended September 30, 2017.
Acting chief executive officer Letwin Mawire told shareholders at an annual general meeting that the highest vacancy levels were in the Harare office sector as businesses continued to avoid the noise, pollution and congestion in the central business district.
Ms Mawire, however, said the company has been engaging the city authorities to ensure regeneration and improved management of the CBD while efforts are also being made to attract new tenants.
“The company has managed to attract a few tenants but has not been able to completely fill in the space that has been vacated,” she said.
Property expenses closed the period at $575 000 which was 10 percent above same period last year and 24 percent above budget due to voids related costs and provisions for credit losses. Resultantly, property expenses income ratio was 35 percent compared to 31 percent in the same period last year.
The rental collection ratio as at the end of the period was 64 percent, a slight improvement from 62 percent over the same period in the prior year. Mash Holdings wrote off $0,8 million worth of legacy rent arrears, some dating back as far as 2009.
But current tenants remain stable in spite of the difficult operating environment. Ms Mawire added management would continue to actively follow up on arrears and engaging defaulting tenants.
Administration expense to income ratio was 21 percent compared to 31 percent for the same period last year due to lower staff related costs arising from the suspension without benefits and subsequent dismissal of some top management.
Management has, however, indicated the company remains well positioned to seize profitable opportunities from the anticipated improvements in local industry.
Online Reporter