Online Reporter
Tapiwanashe Mangwiro
WEST Properties (WestProp) Holdings’ 2024 full-year revenue surged 80 percent, but the solid topline expansion could not positively impact the bottom line after operating profit plunged by 54 percent.
While the revenue growth remained robust, driven by strong residential sales, bottom-line performance was weighed down by a sharp contraction in valuation gains and rising operating expenses.
According to the abridged consolidated statement of profit or loss, profit for the year fell 54 percent to US$18,26 million, down from US$39,43 million in 2023.
WestProp’s profit slump was despite the strong growth in gross profit to US$11,1 million from US$5,8 million.
The company said, “This marked decline owed chiefly to a significant reduction in fair value gains on investment property, one of WestProp’s key profit drivers and escalating costs linked to both its ongoing developments and recent acquisitions.”
Total revenue climbed an impressive 80 percent, from US$16,09 million to US$29,05 million, reflecting vigorous demand across WestProp’s three major residential estates.
“Pomona City Residential Estate led the way, contributing US$15,61 million, followed by Pokugara at US$9,42 million and Millennium Heights at US$4,02 million.
“This surge underscores continued appetite among Zimbabwe’s middle-class buyers, even as broader economic headwinds persist,” WestProp added.
However, alongside revenue gains came a more restrained property valuation environment.
Fair value adjustments on investment property came in at US$18,84 million, sharply lower than the US$49,51 million recognised in the previous year.
“The lower fair value adjustments reflect a more stabilised real-estate valuation environment compared to the previous year, when adjustments were high,” the group noted, signalling that the once buoyant benchmark gains of 2023 were unlikely to repeat in the near term.
Operating expenses rose markedly to US$8,64 million, up from US$5,18 million in 2023, reflecting WestProp’s strategy to scale up its development pipeline and integrate new subsidiaries.
The company explained, “The increase was in line with the group’s expansion strategy to scale up and enhance sales and the resultant pipeline, which now stands at US$175 million.”
As projects such as the Pomona City walk-up flats and Millennium Heights Block 4 gather pace, WestProp is investing heavily in construction, marketing and administrative support.
While these outlays have bolstered the company’s capacity to deliver homes more quickly, they have also put pressure on near-term profitability.
Basic earnings per share (EPS) fell to 61,86 cents from 131,42 cents in the prior year, with diluted EPS similarly dropping to 60,55 cents from 130.74 cents in 2023.
“Despite the EPS contraction, headline earnings per share doubled from 4 cents to 8 cents, signalling that the core operating performance remains sound once non-recurring valuation swings are stripped out,” WestProp explained.
The jump in headline EPS can be viewed as an endorsement of WestProp’s operational resilience.
Through isolating the one-off fair value adjustments, headline measures suggest that the company’s underlying margin on property sales has improved, even as market-wide revaluation gains have normalised.
WestProp closed 2024 with total assets of US$213,51 million, up from US$183,16 million, driven largely by the growth in investment properties, which now stand at US$158,47 million.
Equity climbed to US$151,73 million, up from US$135,88 million in the prior year, reflecting strong retained earnings growth despite the profit dip.
Cash and cash equivalents increased marginally to US$2,82 million, while current assets, including trade and other receivables, grew to US$25,06 million.
The company’s debt-to-equity ratio remains conservative, underpinned by stable shareholder funding and preference shares.
In a bid to balance reinvestment with shareholder returns, the board declared dividends of US$2,40 million for the year.
While smaller than the amount paid in 2023, the payout underscores WestProp’s commitment to rewarding investors even as it channels capital into new projects.
Looking ahead, WestProp is positioning itself for a steady recovery in valuation gains, supported by a healthy pipeline of high-margin residential offerings.
“The group has flagged the upcoming handover of Millennium Heights Block 4 and the launch of Pomona City walk-up flats as catalysts for both recurring rental income and further revaluation upside
“Strategic investments such as the in-house glass and aluminium plant (TrustProp Aluminium) and the BrickFusion brick-moulding factory aim to enhance construction efficiencies and cost control, potentially mitigating the effect of rising input prices in future cycles,” the company added.
