Chronicle Editor
Senior Business Reporter
Hospitality group — Rainbow Tourism Group Limited (RTG) — is considering expanding its hotel portfolio in carefully selected areas around the country as part of elaborate efforts to increase value for its shareholders.
Added to that, the listed hotel entity is also focusing on expanding it’s reach in the tourism value chain through investment in tour operations and Heritage Expeditions Africa.
In a financial statement for the full year ended 31 December 2022, the hospitality firm said financial sustainability underpins its shift to value protection and creation.
“This requires an unwavering focus on disciplined, profitable growth that enables the Group to invest in the future while providing an acceptable return to shareholders. Building a sustainable balance sheet with manageable levels of debt remains a primary material matter for RTG,” reads part of the statement.
“The Group managed to extinguish its debt and maintained a robust plan to ensure the existing solid working capital base is sustained. We do not believe these positive developments are aptly reflected in RTG’s share price which currently trades at a discount to its net asset value.”
As such, the board is considering various options that are designed to increase value for shareholders.
The options include expansion of the Group’s hotels portfolio in carefully selected areas around Zimbabwe, a focus on technology and digitisation through the activation and expansion of the Gateway Stream mobile application and focus on expanding the Group’s reach in the tourism value chain through investment in the tour operations and Heritage Expeditions Africa.
The statement said hotel occupancy for the period under review closed at 51 percent which is a 65 percent increase from the 31 percent posted in 2021.
The Group is now operating at above 2019 levels.
“Volumes improved significantly during the year under review buoyed by accommodation, outside catering, Heritage Expeditions Africa activities as well as Gateway stream revenue channels such as online shopping and the music application.
“City hotels conferencing business recorded positive performance during the year. The Group posted revenues of $24,5 billion, 131 percent above $10,6 billion posted in 2021,” reads part of the statement.
Despite increased pressure from inflation, the Group’s gross margins for the year under review remained unchanged at 70 percent compared to full year 2021.
The improvement in gross profit margins is attributable to cost reduction measures that were put in place to mitigate the effects of increasing prices in the market.
The Group posted an Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of $2,7 billion during the year under review which was 29 percent above the $2,1 billion posted in 2021.
It noted that strong revenue performance coupled with a relentless grip on costs were key drivers to a healthy EBITDA performance.
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