admin
Enacy Mapakame and Michael Tome
Listed property firm, Mashonaland Holdings Limited’s operating profit for the four months to January 31, 2019, totalled $1,1 million, which was 47 percent above same period last year and 22 percent ahead of budget.
Operating profit margins rose to 62 percent from 45 percent in the comparable prior year period.
Mashonaland Holdings managing director Gibson Mapfidza told shareholders that the company recorded improvements despite the challenging operating environment which resulted in delays in implementation of projects.
He cited the Westgate cluster house development and delays in sale of stands at its Windsor project in Ruwa.
The sale of Windsor stands will now commence this April.
The firm is however carrying out robust internal initiatives to consolidate its market and survive the obtaining challenges.
“The current internal processes and procedures optimization work the company is carrying out should see us further improving our efficiencies in the manner we deliver our real estate services to our customers and further improve our operating profit margin.
“Going forward the company’s strategy is anchored on three strategic pillars that portfolio performance optimisation, diversification through new developments in emerging retail and office park corridors and robust corporate governance,” said Mr Mapfidza at the firm’s annual general meeting.
Revenue for the four months grew 7 percent to $1,68 million compared to $1,58 million recorded in the same period last year.
Management attributed the revenue growth improved occupancy level which now stands at 76 percent compared to 71 percent during the prior year comparable period.
Property expenses declined 23 percent to $311 000, which was 31 percent below budget on the back of improved occupancies which saw a reduction in cost of voids expenses.
During the period under review, collections improved from long outstanding debtors resulting in a favourable movement in bad debts provisions. Currently, collection stands at 86 percent.
Although effects of rent reviews were not factored in the figures for the period under review, Mashonaland Holdings effected rent reviews on February 01, 2019. Through rent reviews, the firm achieved a total portfolio revenue upliftment of 58 percent to date.
Aggressive rent collections also saw arrears falling to 14 percent from 36 percent in the prior year comparable period.
Currently, average rent per square metre for Central Business District (CBD) office, industrial and pre-retail stands at $11,50, $4,10 and $22 respectively.
“In line with market dynamics and the need to retain property values, the company reduced its rent review terms to three months to ensure regular reviews in line with market dynamics,” said Mr Mapfidza.
The property sector in general has been affected by the economic slowdown, which has resulted in companies downsizing operations while others close.
Commercial properties in the central business district (CBD) in particular have been the biggest casualties with more voids as companies move to suburban properties or office parks or cheaper options.
The retail property has however been growing, in line with the growth in the country’s retail sector.
Portfolio void level stood at 24 percent during the period under review compared to 29 percent in the prior year.
Mr Mapfidza indicated the company was looking for ways that will enhance real estate services offered by the company and will now direct its sights on the improvement of portfolio performance optimisation, diversification and corporate governance.
Online Reporter