- Turnstar Holdings' pre-tax profits expected to increase by 24%.
- Profits primarily attributed to property value appreciation.
- Turnstar's revenue from operating activities remained steady.
Harare- Turnstar Holdings Limited (Turnstar), a property development and investment company based in Botswana, recently released its trading statement for the financial year ending January 31, 2023. According to the statement, Turnstar’s operational profits remain in line with the previous financial year. However, overall pre-tax profits are expected to increase by 24% to P142 million, compared to P114 million last year.
The increase in profits is primarily attributed to the appreciation in the fair value of Turnstar’s properties in Botswana, Tanzania, and Dubai, which added P31.2 million. Turnstar’s revenue from its operating activities remained steady. However, higher interest rates and a stronger US dollar led to an increase in finance costs by P9.6 million to P30.9 million.
Turnstar is a diversified property group that develops and manages office parks, shopping malls, hotels, residential and industrial properties across Southern Africa and the Middle East. The group owns several landmark properties, including the Turnstar House in Gaborone and the Arusha Municipality Mall in Tanzania.
Although revenue was flat, Turnstar’s profits were buoyed by an increase in property valuations, indicating the company’s portfolio of real estate investments continues to appreciate robustly. The rise in interest rates is unlikely to significantly impact profits, given Turnstar’s stable cash flows and revenue. Overall, the trading statement suggests Turnstar remains in a solid financial position to continue expanding its portfolio of commercial and residential property assets.
In the coming financial year, Turnstar Holdings Limited (Turnstar) is likely to face a range of challenges that could impact its operations and profitability. One significant factor is the potential for inflation, which could increase the cost of construction and maintenance projects. In addition, geopolitical tensions in the Middle East and Africa, where Turnstar operates, could impact the company's ability to expand its portfolio and secure new investment opportunities according to Aaron Chiraerae, a Business Analyst with Equity Axis.
Another key consideration for Turnstar is the potential impact of the COVID-19 pandemic on the global economy, including the real estate market. The pandemic has caused disruptions to supply chains, reduced consumer demand, and increased uncertainty, all of which could impact the demand for commercial and residential properties.
Chiraerae added that despite these challenges, Turnstar may also benefit from several factors in the coming financial year. For example, the appreciation in property values in Botswana, Tanzania, and Dubai is expected to continue, which could boost the company's profits. In addition, Turnstar's diversified portfolio of properties across Southern Africa and the Middle East may help to mitigate the impact of any regional economic downturns or political instability.
To succeed in the coming financial year, Chiraerae opines that Turnstar will need to remain vigilant and responsive to changing market conditions. This may involve diversifying its portfolio, exploring new investment opportunities, and investing in technology and infrastructure to remain competitive in the real estate market. Overall, Turnstar's ability to navigate these challenges and capitalize on emerging opportunities will depend on its leadership, strategy, and execution in the coming months.
The full results for the financial year ending January 31, 2023, are expected to be released in the coming months. Turnstar’s shares trade on the Botswana Stock Exchange under the ticker symbol ‘TURNST.’
