Brainworks has reported a loss position for the 12 months period to December 2017 as aims to unlock value through a regional listing. Brainworks is a holding company with investments in real estate, hospitality financial services and logistics sectors in Zimbabwe.
The company controls African Sun, which it has successfully turned around since taking over 4 years ago. Other investments include Dawn Properties which premises African Sun hotels across the country and Getbucks, a profitable deposit taking microfinance bank in Zimbabwe, which it is, however in the process of disposing.
In 2017 Brainworks opted for a JSE listing, notably after effecting various operational changes such as balance sheet restructuring at African Sun and other investee companies most of which turned profitable. The company is currently planning a secondary listing on the ZSE.
Over the one year period the company reported a loss before tax position of $6 million which compares to a loss of $4.4 million in 2016 defying a fairly improved operating performance.
The loss was as a result of an increase in finance charges following increased borrowings after the company accessed a $10 million loan facility, in turn driving overall borrowings to $38.5 million.
Other costs to weigh on profitability included once off fair value loss on Getbucks, in line with the microfinance’s disposal. The unit is being disposed for a $5.5 million consideration, as part of an ongoing reorganization and balance sheet restructuring process.
Further weighing on performance was GetCash, a mobile money investment which has perennially reported losses since its acquisition 4 years ago. Getcash rebranded from Nettcash post acquisition, has found the going tougher in a space dominated by MNO notably, Cassava’s Ecocash.
Once off listing costs, at $1.7 million capped performance dampeners to push the company into sustained bottomline losses.
Revenue for the period was $58.59 million, an improvement of 22% on the $48.06 million achieved in the prior year. Released earnings shows that all segments of the business recorded improved revenue performance notably the hospitality segment.
The hospitality unit African Sun realized a 19% growth in revenue to 51.8m which is 88% of total revenue. The growth was on the back of an increase in occupancy levels in all 3 market segments, international, local and regional arrivals.
In 2018 the company is focused on raising capital, which it most do through disposal of shares. The capital to be raised will be channeled towards debt extinction as it currently is at unsustainable levels.
