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ZIMRE Property Investments Limited registered a 24 percent increase in revenue to US$3,65 million in the half year ended June 2013 from US$2,93 million due to project developments in residential accommodation. After tax profit was up by 8 percent to US$1,13 million from US$1,11 million over the same period last year.
Zimre also achieved an operating profit of US$1,6 million compared to US$1,48 million, representing an 8 percent improvement. This was despite a 31 percent increase in administration costs.
In a statement accompanying the results, company chairman Ambassador Buzwani Mothobi said that the rental income was adversely affected by the constrained liquidity situation with total rental income registering a 4 percent growth to US$1,94 million from US$1,86 million in the same period last year.
“Rental income contribution reduced significantly from a high of 70 percent in December 2012 to 53 percent in June 2013 as projects income contribution to total income increased from 21 percent to 43 percent over the same period.
“Collection of rent also slackened due to challenges being experienced in the economy and dropped to an average 97 percent compared to 100 percent over the same period last year. Void ratio rose from 9,1 percent to 11,8 percent.”
This was attributed to the liquidity problems, tenants surrendering their space, opting to move to suburban areas and office parks or closing shop altogether.
Legal action was also taken against those who failed to pay their rental obligations, a company representative indicated.
The company’s portfolio debtor grew by 19 percent in the first half of the year and has become a serious cause of concern for the company.
Finance and administration director Mr Nyasha Nzou told the Herald Business yesterday that unlike in the past where rentals were paid in advance, current tenant practices were to pay in arrears, resulting in significant debtors’ balances.
The liquidity situation has aggravated the debtors’ situation not only in Zimre but also in the economy generally.
Zimre added that rigorous efforts to collect and recover all outstanding debts were being pursued and will remain a priority focus area for them. The company has therefore made a provision of US$612 780 for doubtful debts.
Basic earnings per share and diluted earnings per share in the period under review changed to US7 cents from US6 cents in the previous period while the headline earnings per share were down by a cent from US0,07cents to US0,06 cents.
Looking forward, Zimre continues to actively seek and pursue opportunities to diversify the value of its property portfolio for the benefit of all stakeholders.
Online Reporter