- ZWL448.5 was committed to property refurbishment
- Property was valued at ZWL853.85
- PAT surged by 311%
Harare- First Mutual Properties Holdings Limited, a real estate investment and property development company listed on the Zimbabwe Stock Exchange (ZSE), invested ZWL445.8 million in enhancing the quality of its properties during the half-year period ending on 30 June 2023. The company's primary source of revenue continues to be rental income.
In a statement accompanying the half-year financials, the Company’s chairperson Elisha Moyo said, “Demonstrating the Company’s commitment to providing a quality and safe product (property) to its tenants, ZWL 404.2 million and ZWL 44.3 million were committed towards maintenance and improvements respectively during the period under review.”
First Mutual Properties Holdings Limited aims to generate rental income and capital appreciation from its property portfolio. The company actively manages its properties, seeking to enhance their value through strategic investments, renovations, and leasing activities. Their objective is to provide attractive returns to shareholders and contribute to the growth of Zimbabwe's real estate sector.
“The Group has strategically positioned itself to generate shareholder value through the pursuit of a range of projects which are currently at varying stages of execution,” said Moyo.
During the period, the Group experienced significant growth in key financial indicators. Net Property Income increased by 10%, reaching ZWL1.333 billion compared to the previous period's ZWL1.213 billion.
According to Night Frank Zimbabwe's valuation report, the property portfolio of the Group was valued at ZWL 853.85 billion as of 30 June 2023. This represents a significant increase of 679% compared to the previous financial year, where the property value was valued at ZWL 109.37 billion. The substantial growth in property value was attributed to the increased rental income generated.
This growth was consistent with the inflationary environment prevalent during the period. The company's ability to capitalize on the rising rental rates has contributed to the significant appreciation in the value of its property portfolio.
The value of the Group's investment properties surged by 150%, rising to ZWL853 billion from ZWL341 billion. These figures reflect the company's continued success and expansion in the real estate market.
As a result, revenue skyrocketed by 119%, surging to ZWL8.026 billion from ZWL3.661 billion while PAT increased by 311% from ZWL122 billion to ZWL504 billion. This significant rise in profitability highlights the company's success in managing its operations efficiently and maximizing its earnings.
The Group highlighted that the Arundel Office Park extension, which entails the construction of a double storey office building with a basement and a lettable area of 2,616.50 square metres, was progressing well. According to the update, the roof slab concreting is complete to date. The overall total project progress was reported at 60% as of the reporting date.
In Chinhoyi, Moyo said the Group is nearing the completion of a four-storey student accommodation building. The majority of the structures had reached the second-floor level. This project, which holds prescribed asset status, is being carried out in partnership with institutional investors.
Additionally, Moyo said the Group was actively involved as a co-investor in the development of mixed-use duplex clusters, three to four storey flats, and student hostels in Zvishavane. The proposed designs for these developments have received approval from the Zvishavane Town Council.
According to Moyo, construction work has commenced on site, with Phase A comprising six duplex flats, while the remaining 20 blocks of double and triple storey flats were at trenching and brick footing levels.
Moyo emphasized that the management team has maintained active engagement with tenants to ensure timely rental reviews and payments. This proactive approach has resulted in a slight decrease in the number of defaulting tenants who previously intentionally delayed meeting their lease obligations. As a result, the collection rate has improved to 87% from 86%.
The Board has resolved to declare a second interim dividend of ZWL375.1 million, which translates to ZWL30.34 cents per share, and US$130,250, equivalent to US$0.011 cents per share. This dividend will be distributed from the profits generated during the second quarter that ended on 30 June 2023.
Shareholders of the Group who are registered as of the close of business on 6 October 2023 can expect to receive the dividend on or around 27 October 2023. The shares of the Group will be traded cum-dividend on the Zimbabwe Stock Exchange until 3 October 2023. From 4 October 2023 onward, the shares will be traded ex-dividend.
Despite the prevailing uncertainty, the business affirms its unwavering commitment to its growth strategies aimed at maximizing shareholder value. These strategies include targeted investments in lucrative properties, which serve as a valuable hedge against inflation and exchange rate risks. By carefully selecting investment opportunities, the business seeks to mitigate potential financial challenges and capitalize on favourable market conditions.
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