First Mutual Properties reports 50% increase in pre-tax profit

  • Revenue increased to ZWL265.74 million
  • Basic earnings per share of 2.91 cents ahead of 1.23 cents in 2019
  • Occupancy averaged 88.67% in 2020 compared to 85.70% in 2019
  • FMP is planning to invest in new projects in the property market

HARARE – First Mutual Properties (FMP) Limited, a subsidiary of First Mutual Holdings reported a strong set of full-year 2021 results that saw an overall occupancy level average of 88.64% compared to 85.70% a year earlier, despite the impact of COVID-19 on business operations.

The financial report, which was published on 23 June 2021 after delays, shows that by all measure pre-tax profits skyrocketed. Indeed, FMP reported profit before tax in inflation-adjusted terms of ZWL3.288 billion, 50% ahead of ZWL2.189 billion reported in 2019.

In a statement accompanying the financial report, the Group’s Chairperson, Elisha Moyo, said the growth in profit was driven by growth in inflation-adjusted revenue of 2% to ZWL 265.74 million (FY 2019: ZWL 260.67 million) and fair value adjustments on investment properties.

‘The growth in revenue was driven by rental income generated from foreign currency denominated leases, increase in turnover rentals and rise in occupancy levels during the year,” Moyo said.

“The overall occupancy level averaged 88.67% in FY2020 compared to 85.70% in the previous year, mainly due to new lettings in the CBD office sector.”

It was not an easy ride as the property sector during the period remained largely depressed with limited sales transactional activity coupled with the effects of the COVID-19 pandemic on business operations.

Nevertheless, the Group prioritised the safety of the tenants, with ZWL32.99 million spent, targeting the maintenance and upgrading of space for new and existing tenants.

“This investment ensured that our properties remain safe for occupation,” Moyo said.

In response to COVID-19, the Group undertook a continuous review of the conditions of service for its staff members, provision of protective personal equipment (PPE), psychological support, and accelerated the use of digital platforms to enhance remote working and collaboration to sustain productivity.

Net property income for the period under review came in at ZWL0.195 billion slightly ahead of ZWL0.194 billion recorded in 2019.

The Group grew its asset position to ZWL9.631 billion, which is 51% above ZWL6.373 billion recorded in 2019.

Going forward, the Group is planning to invest in new projects in the property market taking advantage of the introduction of Real Estate Investment Trust (“REITs”) legislation while also creating further diversification opportunities.

“These are emerging opportunities that the Group seeks to explore,” Moyo said.

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