- Declining Occupancy Rates: A drop in shop occupancy rates to 30.77% in Q3 2024, down from 48.14%
- Revenue Growth: This was despite a 52% increase in revenue to ZWG 941,913
- Profitability marred by leadership deficit
Harare- ZECO Holdings, a loss-making real estate and property company, has reported a decline in shop occupancy rates during the third quarter ended September 30, 2024, despite achieving moderate revenue growth.
The company’s revenue for this period reached ZWG 941,913, reflecting a substantial 52% increase from the previous year's third-quarter revenue of ZWG 621,867.
However, the real estate sector faced significant challenges, with shop occupancy rates dropping to 30.77%, down from 48.14% in the same period last year.
In 2022, ZECO underwent a significant shift in its business strategy by divesting its rolling stock assets for US$4.5 million and pivoting toward real estate and property management.
This strategic move was intended to enhance ZECO's financial standing and set the stage for long-term growth. Following this divestment, the company managed to narrow its FY2023 loss to ZWL 3 billion, down from ZWL 18.96 billion.
However, nepotism and poor management practices have persisted, resulting in over 15 years without profitability.
In November 2023, the company experienced a significant leadership change with the removal of Edmund Chiyangwa, who held an undefined executive position. Edmund was implicated in fraudulent activities involving the tampering of property deeds in an attempt to secure a secret mortgage for personal gain.
The company has a troubling history, as both Edmund and his brother Brian were sued in 2019 by Getbucks Microfinance Bank for failing to repay a debt of up to US$800,000, an issue that was eventually resolved using company funds.
Rather than appointing qualified individuals to leadership roles, Philip Chiyangwa replaced Edmund with another son, Bruce, who has demonstrated similar questionable behaviour.
This situation serves as a cautionary tale for business owners about the risks of appointing family members to management positions based solely on familial ties rather than merit.
As ZECO pilots these challenges, the need for responsible leadership and a commitment to sound business practices has never been more critical.
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