• New Facilities: Aluminium and glass fabrication plant and brick manufacturing facility by end-2024
•  Revenue Growth: 1HY revenue increased 77% to $14.23 million, driven by Pokugara Properties, Pomona City sales
• Strategic Expansion: New facilities to reduce reliance on third-party suppliers, decrease costs, and increase profit margins

Harare- West Properties (West Prop), a leading real estate company, expects to commission an aluminium and glass fabrication plant and a brick manufacturing facility before the end of 2024. This move will insource most of its major raw materials, which are currently at an advanced stage.

This comes after the REIT has completed the Millennium Heights Block 3 (Seatrite Properties), with a handover date to be announced before the end of Q3 2024.

Despite delays in completing roads for Pomona City 1B & 1C in Q2 2024 due to contractor resource allocation issues, the Group remains on track to launch Pomona city flats this year with plans to announce the rollout of the remainder of the US$4 billion city in Q1 2025.

West Prop is also in the final stages of negotiations with South African partners for Zimbabwe's first regional mall, "The Mall of Zimbabwe," expected to break ground post-mid-2024.

Aluminium and glass fabrication involves the processes of cutting, shaping, and assembling aluminiumx and glass materials to create finished products used in various industries. This can include everything from window frames and curtain walls to structural components for buildings and custom glass installations.

The fabrication process typically requires advanced machinery and skilled labour to ensure precision and quality. For West Prop, which operates in the construction and building materials sector, this type of fabrication is crucial.

It allows the company to produce essential components that contribute to the structural integrity, aesthetics, and energy efficiency of buildings.

On the ither hand, a brick manufacturing facility focuses on the production of bricks, which are fundamental building materials used in construction.

For West Prop, establishing a brick manufacturing facility aligns perfectly with its line of production, as it enables the company to provide a wider range of sustainable building materials that are increasingly sought after in green construction practices.

These facilities will enable West Prop to streamline its production processes, reduce lead times, and improve overall product quality.

This strategic expansion not only aligns with current market trends but also enhances West Prop’s capacity to meet the diverse needs of its clients, ultimately driving growth and establishing a stronger competitive edge in the construction industry.

West Prop's top-line is expected to receive a significant boost from the commissioning of the aluminum and glass fabrication plant and brick manufacturing facility. The expanded product offerings will attract a wider customer base, increase revenue streams, and enhance the company's market share in the construction industry.

By insourcing aluminum and glass fabrication and brick manufacturing, West Prop will reduce its reliance on third-party suppliers, improve efficiency, and increase profit margins.

This, combined with higher revenue, will contribute to increased net profit and enhanced competitiveness.

The commissioning of these facilities will also lead to significant expense reductions for West Prop. Raw material costs, transportation expenses, and labour costs will all decrease as a result of insourcing and improved operational efficiency.

HY Financial Performance

Meanwhile, the company's half-year performance report for the six months ended June 30, 2024, shows the company remained profitable with revenue increasing by 77% from US$8 million in 2023 to US$14.23 million in 2024 representing a US$6.19 million increase.

Key contributors to this performance included Pokugara Properties (Residential Estate Townhouses), which contributed 46% of revenue through townhouse sales, and Pomona City, which contributed 43% through vacant stand sales.

"The Group's major investment in freehold property, plant, and equipment, as well as insourcing aluminum and glass products, contributed to the growth of our gross profit margin," said Michael Louis, the group's chairperson.

"Efficient management, better project planning, and execution decreased construction costs."

The group recorded a net profit after tax of US$4.38 million with a notable net profit margin of 31%.

Total assets increased by US$34.10 million, primarily driven by investment property fair value gains and investment in property, plant, and equipment while equity grew by 22% (US$26.21 million), with fair value gains on investment property playing a significant role.

As a result, West Prop declared an interim dividend of USD 1,714,284 payable to ordinary shareholders from the distributable profit for the half-year 2024, with a full dividend announcement to follow.

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